transformation programme

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GLC TRANSFORMATION PROGRAMME: PROGRESS REVIEW MAY 2012 Putrajaya Committee on GLC High Performance (PCG) www.pcg.gov.my Putrajaya Committee on GLC High Performance (PCG) Transformation Management Office, Level 33, Tower 2, Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur Tel :+ (603) 2034 0000 Fax :+ (603) 2034 0300 GLC TRANSFORMATION PROGRAMME PROGRESS REVIEW 2012 MAY 2012 G L C H I G H P E R F O R M A N C E P U T R A J A Y A C O M M I T T E E

Transcript of transformation programme

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GLC TRANSFO

RMATIO

N PROG

RAMM

E: PROG

RESS REVIEW M

AY 2012P

utrajaya Co

mm

ittee on G

LC H

igh P

erform

ance (PC

G)

www.pcg.gov.my

Putrajaya Committee on GLC High Performance (PCG)

Transformation Management Office, Level 33, Tower 2,Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur

Tel :+ (603) 2034 0000 Fax :+ (603) 2034 0300

GLCTRANSFORMATION

PROGRAMMEPROGRESS REVIEW 2012

MAY 2012

GLC

HIGH PERFORMANC

E

PU

TR

AJAYA COMMITTEE

BIRU = c = 100 m= 100 y = 0 k = 0

MERAH = c = 0 m= 100 y = 100 k = 0

PUTIH = c = 0 m= 0 y = 0 k = 0

KUNING = c = 0 m= 0 y = 100 k = 0

HITAM = c = 0 m= 0 y = 0 k = 0

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GOVERNMENT-LINKEDINVESTMENT COMPANIES ANd G201

1 A selection of originally 20 larger GLCs controlled by the Government-Linked Investment Company constituents of the Putrajaya Committee on GLC High Performance. There are currently 17 GLCs in G20 due to various mergers, demergers and corporate exercises.

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TABLE OF CONTENTS1 Foreword By YAB Prime Minister 3

2 Foreword By PCG Secretariat 4

3 Executive Summary 5

4 The GLCT Programme Journey 11

5 Progress And Achievements To-date 17a. Financial Updateb. Benefits To Stakeholdersc. GLCT Programme Activities

6 Towards Transforming Malaysia 33a. Government Transformation Programmeb. Supporting The New Economic Model (NEM)c. Supporting The Bumiputera Agenda

7 Moving Forward Towards 2015 47a. Changing Landscape And Its Impact On GLCsb. New Transformation Programmesc. New Expectation On GLCsd. Adoption Of New Thought Leadership

For Step Change In Performance

Appendices 55Appendix A – PCG And JWT StructureAppendix B – Economic Profit definitionAppendix C – G20 ScorecardsAppendix d – Awards Received By GLICs And G20 (2011 & 2012)Appendix E – 1Malaysia Products/Services For The ‘Rakyat’Appendix F – G20 FootprintAppendix G – Acronyms & Abbreviations

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1 FOREWORD BY YAB PRIME MINISTER

Since the introduction of various Government transformation programmes over 30 months ago, much has been achieved. In 2011, both the gross domestic product (GDP) and gross national income (GNI) reached new national records of RM852.7b and RM830.7b respectively. Trade was also at one of our historic highs, rising to RM1.27 trillion. Government revenue also reached a new national record of RM185.5b. This was made possible due to clarity of direction and strong commitment from the Government, which in turn resulted in strong support from the Government-Linked Companies (GLCs) and the non-GLC private sector (for e.g. private investment reached RM92b in 2011, the highest in the last 10 years). We are on the right track but we need to intensify our efforts.

The GLC Transformation (GLCT) Programme continues to play a significant role in this, in view of the collective strength of the GLCT fraternity, and also their contribution, impact and pervasiveness. A notable response from the GLCT fraternity in support of the New Economic Model (NEM) was a framework that encapsulates the 5 roles they need to play. I have noticed much progress on this front with the various programmes, activities and transactions being executed thus far. For example, more GLCs are now in pursuit of regionalisation and some of them are already respected market players in their industries. There is also increasing attention on New Economic Investments (NEIs) by GLCs [e.g. in healthcare and more investments are being committed to the economic corridors actively supported by Government-Linked Investment Companies (GLICs) and GLCs]. We are also witnessing increasing collaborations and

joint ventures between GLCs and non-GLC private sector. To spur entrepreneurship development, GLICs and GLCs have also divested their non-core assets through a robust strategic divestment process which involved a merit-based and transparent selection process (e.g. POS Malaysia and Proton). I am happy and very encouraged that the GLCT fraternity has demonstrated the continued commitment needed for country’s transformation to take place.

The GLCT fraternity has also reached out to their stakeholders in many ways and I am pleased to see that many gains and benefits have been shared with their employees, customers, suppliers and community at large.

In order to provide a more holistic transformation to the country, I have also introduced the Rural Transformation Programme (RTP), Bumiputera Economic Transformation Roadmap (BETR), Talent Roadmap 2020 and the Digital Transformation Programme (DTP). I have also asked the GLCT fraternity to spearhead some areas such as innovation so that they may be an example for other companies in Malaysia. I understand they have made some good progress in this area.

In short, I am pleased to note that the promise of execution by GLCs is taking place and there is a good momentum building up.

Despite all the above achievements, we cannot rest on our laurels. Our transformation journey towards becoming a high income nation by 2020 needs to continue with greater urgency and intensity. GLCs’ active participation will continue to be counted upon so that we can collectively transform Malaysia and ensure a better life for our children.

I am reminded of an old saying (an African saying actually) that to go fast one can go alone, but to go far one has to go together. Very apt. We can’t do this alone, we need to move forward together as Malaysia and one big family.

YAB dato’ Sri Mohd Najib bin Tun Haji Abdul RazakPrime Minister of Malaysia and Chairman of the Putrajaya Committee on GLC High Performance

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The GLCT Programme is currently in year 8 of its 10 year journey. On behalf of the Putrajaya Committee on GLC High Performance (PCG) Secretariat, we are pleased to report that GLCs continue to make strong progress while sharing the gains and benefits that are being reaped and securing a solid footing to move forward together as “Team Malaysia”.

On the financial front, G20 have shown significant improvements in all key indicators. G20 net income for example grew 17.5% year-on-year in FY2011 to RM20.1b, an all time high since the start of the Programme. G20 total shareholder return (TSR) generated a compounded annual return of 13.7% from 14 May 2004 (at the start of the Programme) to 18 May 2012, out-performing non-G20 FBM KLCI by 0.8% p.a.

Since the start of the Programme, GLCs have also made inroads into regional markets. From FY2004 to FY2011, G20 foreign sales (as a percentage of total sales) grew from 26% to 33%. Several GLCs are well on their way to become regional players and even leaders, such as Axiata Group Berhad, Malayan Banking Berhad, CIMB Group Holdings Berhad and Sime Darby Berhad. Several others are successfully extending their footprints outside of Malaysia, such as Malaysia Airports Holdings Berhad (in India, Maldives and Turkey), UEM Group (in Indonesia and India) and UMW Holdings Berhad (in Indonesia, Thailand, Vietnam, Papua New Guinea, Australia, Taiwan, China, India, Oman and Turkmenistan).

The GLCT Programme has thus far ensured that GLCs remain on a robust growth trajectory and has enabled them to show tremendous resilience during the US financial and European debt crisis. These results have enabled GLCs to contribute significantly to the national economy. From 2004 to 2011, G20 paid RM62b in dividends and RM40b in taxes. These dividends and taxes have benefitted the Malaysian public, both directly and indirectly.

2 FOREWORD BY PCG SECRETARIAT

If you recall in 2010, we announced 5 important roles that GLICs and GLCs need to play in support of the NEM. To date, they have made significant progress on these roles as you will see in this report. G20 have also continued to strongly support the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP), committing RM7.4b to various Entry Point Projects (EPP) under the ETP. The broad progress made by GLCs has created value which has and is being shared equitably with stakeholders, and GLCs remain committed to enhance this further. For example, in the recent PCG 24 meeting on 3 May 2012, the GLICs and G20 have agreed to show further appreciation and assistance to their employees by accelerating minimum wage implementation, putting in place a performance-linked long term incentive plan for all employees, and developing an upward mobility scheme to help non-executive employees and their children who have limited options to expand opportunities.

Last year, we have also been kept busy with the communications and stakeholder engagement front. The PCG organised inaugural GLC Open Day in June 2011 to enhance awareness and increase the understanding of the public on the roles played by GLICs and GLCs, whilst highlighting their contribution towards the development of the Malaysian economy. We had approximately 30,000 visitors and this event was well received based on feedback given.

Moving forward, the GLCT fraternity should stay the course and relentlessly execute the GLCT Programme. We also foresee less GLCT Initiative activities at the Programme level as it gets transitioned to the GLC level for sustainability and continuity. This will be done in a structured and proper way to ensure complete institutionalisation.

Finally and on behalf of the PCG Secretariat, we wish to express our sincere gratitude to several key individuals who have contributed significantly to the success of this Programme. They are the Prime Minister, YAB Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak, YB Tan Sri Nor Mohamed Yakcop, YB Dato’ Seri Ahmad Husni Mohamad Hanadzlah, YBhg Tan Sri Mohd Sidek bin Haji Hassan, senior officials from the Ministry of Finance, and GLICs, headed by YBhg Tan Sri Dato’ Sri Hamad Kama Piah Che Othman, YBhg Tan Sri Dato’ Hj. Lodin Wok Kamaruddin, YBhg Tan Sri Azlan Zainol and YBhg Datuk Ismee Ismail. The success attained would also not have been possible without tremendous support from GLICs/GLCs staff and the broader GLC community, all stakeholders and society at large.

Tan Sri dato’ Azman Hj. Mokhtar & Mohd Izani AshariFor Secretariat to the Putrajaya Committee on GLC High Performance

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3 Executive Summary

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The GLCT Programme is in year 8 and the final phase of its 10 year journey. The Programme has ensured that GLCs remain on a robust growth trajectory, while making further inroads in regional markets and have become stronger and more resilient companies.

The transformation of GLCs has yielded wide-ranging results and has strengthened their capacity to further play a major role in contributing to the national economy and transforming Malaysia.

a. GLCs On A Strong Growth Trajectory, Are Expanding Regionally, Have Become Stronger Companies And Are Providing Benefits To All Stakeholders

G20 have shown significant tangible improvements in all key financial areas. FY2011 results indicate that G20 are on a growth trajectory, with key financial indicators such as TSR, net income and economic profit showing significant improvements.

GLCs On A Strong Growth Trajectory

• G20 TSR outperformed the rest of non-G20 FBMKLCI by 0.8% p.a. from 14 May 2004 to 18 May 2012, growing at 13.7% p.a. compared with non-G20 FBMKLCI’s 12.9% p.a.

• Market capitalisation increased by more than two fold from RM140b to RM319b over the same period.

• G20 net income grew 18.2% p.a. from RM9.0b in FY2004 to an all time high of RM20.1b in FY2011.

• G20 delivered a return on equity of 11.8% in FY2011, up from 10.6% in FY2010.

• G20 economic profit (EP) in FY2011 was RM0.7b, down from RM2.0b in FY2010 but much higher than the RM5.7b loss in FY2005.

GLCs Are Advancing Further On Their Regional Growth Aspirations

Since the start of the Programme, GLCs have made inroads into regional markets. From FY2004 to FY2011, G20 foreign sales (as a percentage of total sales) grew from 26% to 33%. Meanwhile, their foreign assets (as a percentage of total assets) grew from 13% to 26% over the same period. G20 also employ 147,230 employees in 40 different countries with 1,509 branch offices in ASEAN alone.

Several GLCs are well on their way to become regional players and even leaders, such as Axiata Group Berhad, Malayan Banking Berhad, CIMB Group Holdings Berhad, and Sime Darby Berhad. Several others are successfully extending their footprints outside of Malaysia, such as Malaysia Airports Holdings Berhad (in India, Maldives and Turkey), UEM Group (in Indonesia and India) and UMW Holdings Berhad (in Indonesia, Thailand, Vietnam, Papua New Guinea, Australia, Taiwan, China, India, Oman and Turkmenistan).

G20 have also earned numerous prestigious international and regional awards that signify market recognition of its products and services.

GLCs Are More Robust And Fundamentally Stronger

Having implemented various corporate restructuring, transformation and armour plating of the balance sheet exercises since the start of the Programme, GLCs are now fundamentally stronger companies and have shown tremendous resilience during US financial and European debt crisis.

• Non-bank G20 operating cashflow grew from RM11.5b in FY2005 to RM21.0b in FY2011.

• Non-bank G20 debt-to-equity ratio improved from 50% in FY2005 to 34% in FY2011.

• G20 achieved 67% of their headline key performance indicators (KPIs) in FY2011 despite stretched targets set.

2 Based on Bloomberg Analyst Consensus Estimates

3 Executive Summary

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GLCs also currently have a more diversified market base with their expansion overseas. Additionally, diligent execution and institutionalisation of the 10 GLCT Initiatives have enhanced the overall management and running of GLCs.

Providing Benefits To All Stakeholders

The broad progress achieved by GLCs has created value which has and is being shared equitably with all stakeholders including customers, employees, suppliers and the society at large. This has been achieved through various human capital development initiatives to increase employee value propositions, enhanced delivery and quality of products and services (G20 have won numerous awards in this regard), vendor development programmes and contributions to society through programmes such as Pintar, Sejahtera and GEMS.

b. GLCs Are Significantly Contributing To The National Economy And Helping To Transform Malaysia

Support For GTP, NEM And ETP

GLICs and GLCs continue to invest and provide on-going support for various national transformation programmes and initiatives which include GTP, ETP and BETR. They will continue to align with NEM (through 5 roles identified) as they support Malaysia’s goals of becoming a high income nation by 2020.

As part of the 5 roles, GLCs have been executing on their various transformation, turnaround, restructuring and growth programmes. As a result of these efforts G20 have returned RM62b in dividends and paid RM40b in taxes from 2004 to 2011.

They have been actively investing in NEIs and contributing to national corridors developments. Since the Programme started, GLCs have invested RM92b domestically. They have also formed successful partnerships with non-GLC

private sector and divested non-core and non-competitive assets. Among the key milestone from 2011 until to date are the strategic divestment of Pos Malaysia, acquisition of Kim Eng Holdings by Maybank, privatisation of PLUS through a joint acquisition by UEM Group and EPF, completion of mandatory general offer on SP Setia by PNB and the recent divestment of Proton to DRB-Hicom. In supporting the Bumiputera agenda, PNB and Khazanah will divest five companies each to Bumiputera companies in order to increase Bumiputera participation in the economy.

c. Moving Forward Towards 2015

GLCs have made strong progress to date under the GLCT Programme. Nevertheless, the road ahead is always fraught with uncertainty and challenges. In particular, the world economic landscape remains precarious with no clear resolution of the Europe debt crisis. Competition is also intensifying with the liberalisation of some sectors in Malaysia, the move towards free trade agreements and the Competition Act 2010 being enforced since January 2012. In addition, the Government has intensified the transformation effort with the recent introduction of various transformation programmes such as the RTP, Talent Roadmap 2020 and DTP. GLCs’ active involvement in these initiatives are critical as the fraternity forms a significant part of the country’s economy.

There have also been new expectations on GLCs to lead in areas related to nation building such as supplying talents and investing in human capital, driving innovation and upholding integrity. To date, the GLCT fraternity has started embarking on these initiatives.

In view of the changing landscape described above, the journey ahead will be more challenging. GLCs may need to start embracing some new thought leadership and breakthrough ideas in order to succeed. These include branding, innovation, process integration, transformation capability and sustainability.

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+13.7%p.a. growth in

TSR

GLCTINITIATIVES

On-going Initiatives,

Circles

PERFORMANCE MONITORING

•AnnualGLCTProgressReview

•HeadlineKPIsreporting

PROGRAMME ACTIVITIES

•24PCGMeetings•InauguralGLC

Open Day in 2011

RM6.5bincreased in economic

profit from FY2005 to FY2011

Increase more than

TWO foldin market capitalisation

from RM140b to RM319b

+18.2%p.a. growth in

aggregateearnings

GLCs PROVIdE BENEFITS TO ALL STAKEHOLdERS

5 ROLES OF GLICs ANd GLCs IN NEM

NATION BUILdING

GLCT PROGRAMME dELIVERY

Source: G20 Reporting, Bloomberg, PCG Analysis

Source: G20 Reporting, PCG Analysis

Source: G20 Reporting, PCG Analysis

Source: G20 Reporting, Iskandar Malaysia 5-Year Progress Review, December 2011; Bernama, 20 January 2012

3 Study on Impact of GLCT Programme on Employees, February 2011

STAYTHE COURSE

RM62bdividends paid

RM40btaxes paid

BECOME REGIONAL

CHAMPIONS

33%overseas revenue in

2011 vs 26% in 2004

PURSUE NEIs

RM92bdomestic investments and contribution to corridors

development

COLLABORATE WITH PRIVATE

SECTORSelected recent

collaborations include MAS, AirAsia and

AirAsia X; and UEM Land and Sunrise merger

dIVESTMENT OF NON-CORE ANd NON-COMPETITIVE

ASSETSRecent divestments include

Proton, Pos andTitan Chemicals

1 2 3 4 5

CUSTOMERSNumerous products and services

AWARdSWON

EMPLOYEESSUPPLIERS SOCIETY

IMPROVEd314 4,690

12,757450,000+

G20 employees welfare

vendors graduated from Vendor Development

Programmes since 2004

families benefitted

graduates trainedstudents adopted

based on study conducted3 and other quantitative data

RM7.4bcommitted investment

in 13 EPPs, G20 actively participated

in all 12 NKEAs through

50EPPs

RM77.8bcommitted investment

surpassing the target of RM47b for first phase

62.8%increase in investment

from RM6.08b in 2010 to RM9.9b in 2011

GTP/ETP ISKANdAR MALAYSIA

NCER

GLCs ON STRONG GROWTH TRAJECTORY

Exhibit 1: Executive Summary – Key Highlights

100=14/5/04

G20 IndexTSR IndexFBMKLCI ex G20

May04

May06

May08

May10

May12

290

240

190

140

90

•••••••••••••

G-20 has outperformed the KLCI by 0.8%

140

319RM’b

179

18 May 201214 May 2004

9.0

7.4

10.9

19.9

14.5

11.8

17.1

20.1

04 FY05 06 07 08 09 10 11

RM’b

FY2005 FY2011

6,493

RM’m

-5,749

744

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4 The GLCT Programme Journey

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Chapter Highlights

• GLCs form an integral part of the Malaysianeconomy and are the main service providers tothe nation in strategic utilities and services (e.g.electricity, telecommunications, airlines, airports,bankingandfinancialservices).

• GLCswereunderperforminginthepast.

• Therefore, GLC transformation was made anationalprioritybythepreviousPrimeMinisterandcontinues tobestronglysupportedby thePrimeMinister.

• TheGLCTProgrammewas officially launched in2005.

• Ithas3UnderlyingPrinciples,5PolicyThrustsand10Initiatives.

• The Programme is now in year 8 of its 10 yearjourney.

• Moving forward, GLICs and GLCs will intensifyexecutionoftheir5rolesinsupportofNEM.

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Industraliasation andmoving up the value chain

1957 1983 1997 2000 2005 CURRENT

Rapid economic growth and privatisation

FinancialCrisis

Maybankbecomes government owned

1969

EPFestablished

1951LTHestablished

1902

Launch of NewEconomic Policy(NEP)

1979

Launch of HeavyIndustrialisationProgramme

1981

PNBestablished

1978

Lembaga Letrik NegaraCorporatised

1990

Danahartaestablished

1998

Financial SectorMasterplanannounced

2001KNB beganoperation1994

1994

LTATestablished

1957Sime Darby isMalaysianised

1979

Jabatan TelekomCorporatised

1987

Malaysian Airport andPostal Departmentprivatized

1992

Bank Bumiputra mergerwith Commerce Bank

1999

MAS widespread assetunbunding exercise

2002

GLCTProgramme

Recoveryand

restructuring

Exhibit 2: History And Evolution Of GLCs

Source: GLCT Programme Progress Review Report, December 2006

a. The GLCT Programme

GLCs form an integral part of the Malaysian economy. They provide mission-critical services, catalyse developments in strategic sectors and, at the start of the GLCT Programme, employ around 5% of the national workforce and constitute 36% of total market capitalisation at Bursa Malaysia.

However prior to 2004, GLCs have underperformed the broader Malaysian market, both financially and operationally – a trend that risked derailing Malaysia’s efforts towards becoming a high income nation by 2020. Therefore, the urgency for transformation of GLCs is imperative in order to catalyse Malaysia to developed nation status.

In order to improve the performance of GLCs, former Prime Minister Dato’ Seri Abdullah Ahmad Badawi announced on 14 May 2004 to make the transformation of GLCs a national priority. This subsequently lead to the launch of the GLCT Programme. The Programme aims to transform GLCs to become high performing entities and also help accelerate the country’s social and economic development. When Prime Minister, Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak, stepped into office in 2009, he announced that the Government is committed to ensure GLCT continues to be implemented, with greater urgency and focus. He also said GLCs must aspire to greater heights, whether best in class or emerging as future regional if not global champions.

The GLCT Programme has 3 Underlying Principles, 5 Policy Thrusts and 10 Initiatives. These were developed and documented in a Transformation Manual which was launched on 29 July 2005.

The 3 Underlying Principles are:

1. It should be performance focused by creating economic and shareholder value through improved GLC performance.

2. It should be based on a national development foundation by supporting growth with equity, improving total factor productivity, developing human capital and developing Bumiputera community.

3. It must fully observe the rights of shareholders and governance of GLCs and within this context, GLCs should also support other valid stakeholder interests.

To support the 5 Policy Thrusts, 10 Initiatives were developed and launched over 2005 and 2006, for implementation at GLICs and GLCs. The 10 GLCT Initiatives (see Exhibit 5) had been identified on the basis of their importance as levers for change, their large potential impact on value, and the unique ability of PCG to drive change in these areas.

The GLCT Programme has a 10-year plan encompassing four phases as outlined in Exhibit 3. The Programme is now in year 8, Phase 4 and continues on its trajectory towards creating several regional champions by 2015.

4 The GLCT Programme Journey

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b. GLCT Programme Stewardship

Given the critical position and role that GLCs have in the nation’s economy and the significant benefits of their enhanced performance, the PCG was established in January 2005 to ensure delivery of a structured GLCT Programme. The PCG is represented by 5 GLICs (i.e. EPF, LTH, LTAT, PNB and Khazanah) and is currently chaired by the Prime Minister with Khazanah as its Secretariat. The principal mandate of PCG was to design, implement and oversee the policies to transform GLCs to high performing companies and establish the institutional framework to programme manage and oversee the execution of the GLCT Initiatives. With the initiatives gaining momentum and producing tangible results, the PCG has now taken a step back to concentrate on the oversight and institutionalisation of the GLCT Initiatives at GLCs.

Since the Programme started, annual progress reviews have been conducted with results published for transparent

reporting and accountability (see Exhibit 6). At this juncture, the GLICs and GLCs are in the midst of intensifying the execution of their 5 key roles in NEM. They are to:

• Stay the course in executing the 10-year GLCTProgramme

• Relentlessly continue their journey to become regionalchampions

• PursueNEIsinlinewithNEM• Collaborate and co-invest with the non-GLC private

sector• Focusoncorebusinessona levelplayingfieldand to

progressively divest out of non-core and non-competitive assets

The GLICs and GLCs are also helping the Government to transform Malaysia by supporting and participating in the various Government transformation programmes.

Exhibit 3: GLCT Programme In Year 8 Of Its 10-Year Journey

2004 2005 2006 2007 2010 2015

Phase 1:Mobilisation, diagnosis & Planning

Phase 2:Generate Momentum

Phase 3:Tangible Results

Phase 4:Full National Benefit

14 months 12 – 17 months 2 – 5 years 5 – 10 years onwards

5/2004 1/2005 PCG Formed

2004 Measures• KeyPerformanceIndicators

(KPIs)• PerformanceLinked

Compensation (PLCs)• Performancecontracts• Boardcompositionreform• RevampofKhazanah• GLCLeadersipChanges

29th July 2005Transformation Manual Launch:• PolicyGuidelines• Ten2005/2006Initiatives

Outcomes:

• DiagnosisofGLCsconducted

• DeterminationofPolicyPrinciples

• Initial2004Initiativeslaunched

• 2005/2006Initiativesimplemented

• Fullroll-outinplace• Keypoliciesendorsedand

executed upon• Earlyfruitsofsustainable

improvements

• Maintainmomentum• Tangible&sustainedbenefits

across GLCs• Visiblebenefitstoall

stakeholders, e.g. customers, vendors, employees

• Largescalestrategicand financial changes made

• MaterialchangestoBoards

• Severalregionalchampions• MostGLCsperformingatparwith

competitors

Source: GLC Transformation Manual, July 2005

WE AREHERE 2012

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Clarify the GLC mandate in the

context of National development

1

Upgrade the effectiveness of

Boards and reinforce the corporate governance

of GLCs

2

Enhance GLIC capabilities as professional shareholders

3

Adopt best practices within

GLCs

4

Implementing the GLCT

Programme

5

3 Underlying Principles:1. Performance

Focus2. National

development Foundation

3. Governance, Shareholder Value and Stakeholder Management

Policy Thrust

Policy Thrust

Policy Thrust

Policy Thrust

Policy Thrust

Exhibit 4: GLCT Programme’s 3 Underlying Principles And 5 Policy Thrusts

Source: GLC Transformation Manual, July 2005

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GREEN BOOKEnhancing Board Effectiveness (April 2006)

Raise overall effectiveness of boards • Structuringahigh-performing

board • Ensuringeffectiveboard

operations and interactions • Fulfillingtheboard’s

fundamental roles and responsibilities

• ConsistentwithMalaysianCode of Corporate Governance, Bursa’s Listing Requirements

REd BOOK Reviewing and Revamping Procurement Practice (April 2006)

Enhance the effectiveness and efficiency of the procurement practices in GLCs • IncreasingGLCsprocurement

value creation through clear specific levers and initiatives

• Guidelinesonsupportingnational development through use of local content and Bumiputera equity share of the economy

PURPLE BOOK Optimising Capital Management Practices (December 2006)

GLCs to optimise their capital structure• Designandoptimisecapital

management using the 4-step Cash flow Analysis Method

• Improvecapitalefficiencyandcreate more value using less capital

• OutlineshowGLCscanimplement capital structure optimisation and capital efficiency improvement initiatives

BLUE BOOK Intensifying Performance Management (August 2005)

Improve the financial and operational performance of all GLCs by intensifying performance management• Tightenedperformance

accountability • Focusonkeybusiness

priorities • Attractanddeveloptalent• Establisharewardfor

performance culture

ORANGE BOOK Strengthening Leadership Development (December 2006)

Sets out practical guidelines to institutionalise good leadership development practices• Leadershipandtalent

development must flow from the business strategy

• Leadershipdevelopmentisa holistic system, not just a process

• Humanresourceandlinepartnership frames all leadership development

• Leadershipdevelopmentmustbe institutionalised

YELLOW BOOK Enhancing Operational Efficiency and Effectiveness (September 2006)

Inculcate mindset for continuous improvement at GLCs• Structuredapproachfor

GLCs to enhance operational efficiency / effectiveness using the Framework for Continuous Improvement (FCI)

• Highlightstheinternaland external operational improvement options

GLIC M&M EnhancingManagement&Monitoring Functions (December 2006)

Reinforce ability of GLICs to monitor and manage GLCs • GLICsrolesindrivingGLC

performance towards value creation

• GLICsapproachdependenton its mandate and investment strategy

SILVER BOOK Achieving Value Through Social Responsibility (September 2006)

Guidance for GLCs to be socially responsible companies and to support national development agenda• Clarifiesexpectationson

GLCs contribution to society • GuidetoGLCsstarting

position in contributing to society

• ProvidesGLCswithcomprehensive set of tools, methodologies and process to proactively contribute to society

MINdA (Malaysian Directors Academy) Strengthening Directors Capabilities (December 2006)

Equip boards with world class knowledge, mindset and skill to perform at consistently high standards• Partnershipwithinternational

and local institutions e.g. IMD • Engagebestcasewriters• Programmesdesignedto

provide on-the-job learning and coaching

WHITE BOOK Creating Value Through Regulatory Management (September 2006)

Improve regulatory environment by encouraging best-practice engagement amongst GLCs, policymakers, regulators and other key stakeholders • Formulationofregulatory

value creation plan • Buildingregulatory

management capabilities • Developstrategicregulatory

mindset by working together with industry stakeholders

Exhibit 5: The 10 GLCT Initiatives

Exhibit 6: GLCT Progress Reviews

2006 2007 2008 2009 2010 2011

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5 Progress And Achievements To-date

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Chapter Highlights

• GLCsareonastronggrowthtrajectory.

• G20TSRoutperformedtherestofnon-G20FBMKLCIby0.8%p.a.from14May2004to18May2012,growingat13.7%p.a.comparedwithnon-G20FBMKLCI’s12.9%p.a.

• G20netincomegrew18.2%p.afromRM9.0binFY2004toanalltimehighofRM20.1binFY2011.

• GLCs are advancing further with their regional growthaspirations.FromFY2004toFY2011,G20foreignsales (asapercentageoftotalsales)grewfrom26%to33%.Meanwhile,theirforeignassets(asapercentageoftotalassets)grewfrom13%to26%overthesameperiod.

• GLCsarealsobeingrecognisedasrespectedplayersabroadhavingearnednumerousprestigiousinternationalawards.

• GLCshavebecomefundamentallystrongerandmoreresilientcompanies, with non-bank G20 operating cashflow growingfromRM11.5binFY2005toRM21.0binFY2011anddebt-to-equityratioimprovingfrom50%to34%inthesameperiod.

• ThebroadprogressmadebyGLCshascreatedvaluewhichhas been shared equitably with all stakeholders includingcustomers,employees,suppliersandthesocietyatlarge.

• Meanwhile,GLCsarecontinuingtoexecuteandinstitutionalisethe10GLCTInitiatives.

Page 20: transformation programme

a. Financial Update

Since the start of the Programme, G20 have shown significant tangible improvements in all key financial areas. FY2011 results indicate that G20 are on a strong growth trajectory.

GLCs Improving Shareholders Value

G20 TSR outperformed the rest of non-G20 FBMKLCI by 0.8% p.a. from 14 May 2004 to 18 May 2012, growing at 13.7% p.a. compared with non-G20 FBMKLCI’s 12.9% p.a. Over the same period, market capitalisation more than doubled from RM140b to RM319b.

Exhibit 7: G20 Total Shareholder Return Index – 14 May 2004 To 18 May 2012

100 = 14/05/04

G20 IndexFBMKLCI ex G20

90

May-06May-04 May-08 May-10 May-12

140

190

240

290

Source: Bloomberg, PCG Analysis

Exhibit 8: G20 Market Capitalisation

14-May-04

31-Dec-05

31-Dec-06

31-Dec-07

31-Dec-08

31-Dec-09

31-Dec-10

31-Dec-11

18-May-12

140

159

203

273

152

253

317 319 319

RM’b

Source: Bloomberg, PCG Analysis

Apart from capital gains, GLCs have also been returning profits to the investment community by increasing their dividend payouts. G20 FY2011 dividend reached a new high of RM14.6b, largely attributable to UEM Group’s RM4.0b payout arising from its divestment of PLUS Expressways. G20 have returned a cumulative RM62b in dividend to shareholders since 2004, translating to a dividend payout ratio of 55%. This is a significant amount, considering G20 had a market capitalisation of RM140b at the start of the Programme on 14 May 2004.

Exhibit 9: G20 Dividend Payments

Source: Bloomberg, PCG Analysis

The significant increase in TSR, market capitalisation and dividend payments are largely on the back of G20’s strong revenue and earnings growth.

GLCs Have Significantly Increased Revenue And Profitability

GLCs’ Revenue On A Strong Upward Trajectory

Exhibit 10: G20 Non-Bank Revenue And Bank Net Income

25

45

65

85

105

125

145

165

10

15

20

25

30

35

RM’b RM’b

Non-bank revenue (LHS)

Bank net income (RHS)

12.2

FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

73.9

88.3

100.3

119.5126.9

120.5

131.7

146.4

13.115.0

20.6

19.7

23.5

29.127.8

Source: G20 Annual Reports, PCG Analysis

RM’b

0

2

4

6

8

10

12

14

16

FY2004

4.5

6.2 5.9

9.1

6.9

4.7

9.6

14.7

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

5 Progress And Achievements To-date

pg 19

Page 21: transformation programme

Revenue growth has been driven by regionalisation and higher average selling price (ASP). Between FY2005 and FY2011, non-bank G20 revenue rose from RM88.3b to RM146.4b, a net addition of RM58.1b. Of this sum, 76% of growth was accounted for by the power, telecommunications, automotive and plantations sectors.

Telecommunications revenue growth has been driven by Axiata’s regional growth programme, with 57% of revenue now derived from overseas markets. Automotive revenue growth was driven by Sime Darby’s exposure to China’s luxury car market. Plantations on the other hand was driven by higher crude palm oil prices (+130% over 2005-2011), on flat-line volume growth of 1% pa. Power revenue was driven partly by Tenaga Nasional’s tariff hikes and on volume growth of 4% p.a.

Bank net income hit RM29.1b in FY2011 vs. RM13.1b in FY2005, growing 16% p.a. This growth was driven by strong domestic loan increase and regional expansion into Indonesia.

GLCs Have Been Growing Profitably

Exhibit 11: G20 Aggregate Earnings

FY2005FY2004 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

7

9

11

13

15

17

19

21

9.0

7.4

10.9

19.9

14.5

11.8

17.1

20.1 RM’b

Net pro�t

Source: G20 Annual Reports, PCG Analysis

G20 aggregate earnings grew at 18.2% p.a., from RM9.0b in FY2004 to an all-time high of RM20.1b in FY2011. Aggregate earnings which averaged RM13.8b p.a. over the past 8 years improved significantly compared to the average of RM4.9b p.a. earned prior to 2004.

Intra-year earnings have been cyclical, in tandem with broader economic conditions, with a sharp earnings dip of 41% during the 2008-2009 Global Financial Crisis. However, it is important to note that: (1) Earnings have now surpassed its pre-crisis peak of FY2007. (2) Underlying revenue growth has been surprisingly resilient on economic dips (e.g. flat-lining over FY2008-2009), yet it has also been highly-geared to economic growth.

G20’s robust earnings growth over the past 8 years has been driven by a mix of revenue growth and operational improvements. Assessment of these two drivers by analysing the composition of revenue growth, as well as that of return-on-equity (ROE) reveals the following:

G20 ROE rose from 7.0% in FY2005 to 11.8% in FY2011 (see Exhibit 12), in tandem with earnings growth. ROEs have been driven by economies of scale and efficiency gains rather than capital structure or ASP inflation. DuPont analysis of non-bank G20 ROE (see Exhibit 13) indicates that in aggregate, higher ASPs did not drive earnings growth, as margins actually fell slightly due to cost inflation. Neither did ROE rise because of more aggressive capital structure, as gearing actually fell, implying that GLCs were not taking excessive financial risk in order to drive growth. Instead, higher ROEs can be explained by economies of scale, due both to operating leverage (as revenue growth outpaced debt overheads) and better asset utilisation.

Exhibit 12: G20 Return On Equity

7.0

9.9

15.0

10.8

8.1

10.6

11.8

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

%

0

2

4

6

8

10

12

14

16

Source: G20 Annual Reports, PCG Analysis

pg 20

Page 22: transformation programme

Source: G20 Annual Reports, PCG Analysis

In FY2011, G20 reported an aggregate EP of RM744m, vs. RM2.0b in FY2010 (see Exhibit 14). This decline of RM1.3b is fully explained by the negative RM2.5b year-on-year swing in MAS’ economic profit, due to its structural and fuel cost issues. Viewed from a longer horizon, G20 EP volatility has largely been explained by swings from MAS and Tenaga Nasional, both of which face industry-wide structural issues. Stripping this out, economic profit for the remaining firms in G20 portfolio has improved sharply since FY2005.

Exhibit 14: G20 Aggregate Economic Profit

Exhibit 13: DuPont Analysis Of Non-Bank G20 Return-On-Equity, 2005-2011

ROE % Net profit/operating profit

Operating profit/revenue

Revenue/total assets

Total assets/total equity

Equity return = (Interest and tax burden) x

(Operating margin) x (Asset turnover) x (Debt leverage)

FY2005 6 0.39 0.11 0.47 2.72FY2006 10 0.55 0.13 0.52 2.60FY2007 16 0.71 0.15 0.58 2.50FY2008 10 0.52 0.14 0.55 2.52FY2009 8 0.52 0.12 0.52 2.47FY2010 9 0.54 0.12 0.53 2.46FY2011 10 0.83 0.09 0.57 2.47

FY2005-2011 ROE p Operating leverage p

Sales margin q Asset utilisation p Capital structure =

Remarks Economies of scale; Interest/tax rates

unchanged

Competitive pressure; Positive

for consumers

Economies of scale Financial risk fell slightly

Source: G20 Reporting, PCG Analysis

GLCs Are Advancing Further On Their Regional Growth Aspirations

Since the start of the Programme, GLCs have made inroads into regional markets. From FY2004 to FY2011, G20 foreign sales (as a percentage of total sales) grew from 26% to 33%. Meanwhile, their foreign assets (as a percentage of total assets) grew from 13% to 26% over the same period.

Overseas operations have been the single largest driver behind G20 growth over the last 7 years, accounting for 35% of incremental revenue and asset growth.

Exhibit 15: Overseas Share Of G20 Revenue, FY2004 Vs FY2011

0

20

40

60

80

100

120

140

160

180

200

26%

74%

33%

67%

FY2004 FY2011

Overseas

RM’b

Domestic

Source: G20 Annual Reports, PCG Analysis

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

-5,749

-584

4,777

RM’m

2,160

-1,410

2,017

744

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

pg 21

Page 23: transformation programme

Exhibit 16: Overseas Share Of G20 Assets, FY2004 Vs FY2011

Source: G20 Annual Report, PCG Analysis

G20 also employ 147,230 employees in 40 different countries with 1,509 branch offices in ASEAN alone (see map on where G20 offices are located in Appendix F).

Led by big-cap firms CIMB, Maybank and Axiata, G20 have made acquisitions worth at least RM30.18b throughout the Asia-Pacific region (see Exhibit 17).

Exhibit 17: Selected G20 M&A Deals, 2004-2011

Year Acquirer Acquiree Country Price (RM’b)

2005 CIMB GK Goh Singapore 0.552008 CIMB Bank Yingkou China 0.162008 CIMB Bank Lippo Indonesia 1.412008 CIMB Bank Niaga Indonesia 1.782008 CIMB Bank Thai Thailand 1.332008 Axiata M1 Singapore 0.142008 Axiata Excelcomindo Indonesia 1.252008 Axiata Idea India 5.742008 Maybank BII Indonesia 8.392008 Maybank MCB Pakistan 2.862008 Maybank An Binh Bank Vietnam 0.432011 CIMB Sicco Securities Thailand 0.082011 Maybank Kim Eng Singapore 4.332012 CIMB RBS Asia Pacific IB International 0.852012 CIMB Bank of Commerce Philippines 0.88Total 30.18

Source: G20 Reporting, News Articles, other publicly available sources

The two leading banks i.e. CIMB and Maybank continued to acquire strategic stakes in banking institutions in the region. This has put them in the forefront of the financial services sector within the ASEAN region in the retail segment as well as investment banking.

Axiata is making headway to becoming one of the major cellular service providers in the region with compounded growth of subscriber base of 22.3% p.a. since 2008. It has a total of 199 million subscribers in the 7 countries where they provide mobile telephony services.

Sime Darby’s exposure in China’s luxury car market has grown considerably, contributing to its overseas income. Sime Darby remains the world’s largest listed plantation firm with a plantation area of 873,222 ha spread over Malaysia, Indonesia and Liberia. Sime Darby’s production contributes 6% of global palm oil production (Malaysia contributes 11% of total global palm oil production).

The rapid pace of regionalisation since 2004 has resulted in some G20 closing the gap with regional best-of-breed peers (see Exhibit 18). The gap in regional banking services in particular, has narrowed, as both CIMB and Maybank are now comparable in size to Singapore’s DBS.

13%

87%

26%

74%

FY2004 FY2011

Overseas

RM’b

Domestic

0

200

400

600

800

1000

1200

pg 22

Page 24: transformation programme

Exhibit 18: Selected G20 Firms Are Closing The Gap With Regional Leaders

0

20 40 60 80 100 120 140

5

10

15

20

25

30

35

40

45

50

CIMB 2005

CIMB 2011

DBS 2005

Singtel 2005

Singtel 2011

Maybank 2005

TM+Axiata 2005

TM+Axiata 2011

DBS 2011

Maybank 2011

Revenue RM’b

Market cap RM’b

Source: Bloomberg, PCG Analysis

GLCs are also being recognised as respectable players abroad. For example, CIMB and Maybank have developed a recognisable brand within the region. G20 have also earned numerous prestigious international and regional awards that signify market acknowledgement and recognition of its products and services. Selected awards won by G20 include:• Axiata:BestBusinessEnablerAward(2011)fromTATA

Consultancy Services, India.• CIMB:BestInvestmentBankinAsean2011fromAlpha

Southeast Asia Magazine and the Best Islamic Bank in Asia 2011 from Asiamoney.

• MAHB:Skytrax 2011WorldAirport AwardsWinner ofthe World’s Best Airport Immigration Service Award.

• MAS: World Travel Awards World’s Leading Airline toAsia 2011.

• Maybank:BestSukukBank andBest Islamic FinanceDeal of the year from World’s Best Islamic Financial Institutions Awards 2012.

• Sime Darby: Readers’ Digest Trusted Brands 2011 –Gold Award by Readers’ Digest Asia.

• TNB:2ndAsia’sBestEmployerBrandAwardbyAsia’sBest Employer Brand Award.

• UMW: accolade for “Eleven Years Without Lost TimeIncident” from International Association of Drilling Contractors.

GLCs Have Also Become Fundamentally Stronger And More Resilient Companies

GLCs’ expansion into regional markets have provided them with a broader and more diversified customer base. Their regionalisation efforts have also been positive to them from a country risk perspective (i.e. not overly exposed or reliant on any single economy).

In addition, GLCs have been implementing various corporate restructuring, operational improvements, transformation and armour plating of the balance sheet exercises since the start of the Programme. These have made them fundamentally stronger companies and indeed they have shown tremendous resilience during US financial and European debt crisis.

Operating cashflow for non-bank G20 firms hit RM21.0b in FY2011, vs. RM11.5b in FY2005, a CAGR of 10.5%, in line with revenue growth.

Exhibit 19: Non-Bank G20 Operating Cashflow

11.5

13.9

26.3

19.017.3

24.2

21.0

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

RM’b

0

5.0

10.0

15.0

20.0

25.0

30.0

Source: G20 Annual Reports, PCG Analysis

Non-bank G20 gearing fell from 50% in FY2005 to 34% in FY2011. Some GLCs such as MAS and Maybank have chosen to finance their acquisitions and capital expenditure programmes with new equity issuances, rather than through additional debt. Average borrowing costs have stayed fairly stable, ranging between 5.8% to 6.3% over the prevailing period.

pg 23

Page 25: transformation programme

Exhibit 20: Non-Bank G20 Debt-To-Assets Ratio

0

5

10

15

20

25

30

35

40

45

50

0

10

20

30

40

50

60

FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

Net debt (LHS)

Debt-to-equity (RHS)

RM’b %

Source: G20 Annual Reports, PCG Analysis

In FY2011, G20 achieved 67% of their key financial and operational performance indicators (or what is known as the Headline KPIs among the GLCT fraternity). It is slightly lower from the 72% achieved in 2010 due to stretched targets set for the year. However, it is an improvement from a low of 54% in FY2008.

Exhibit 21: G20 Headline KPI Achievement (%)

7276

54

64

72

67

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

%

0

10

20

30

40

50

60

70

80

Source: G20 Annual Reports, PCG Analysis

The significant improvement of investment analysts’ perception of GLCs, based on the annual GLC Broker Survey (see Exhibit 22), also corroborates the fact that GLCs are becoming stronger companies.

The proportion of GLCs receiving positive and neutral scores have increased, while those receiving negative scores have declined. Key takeaways include:

• The market’s perception of GLCs has improvedsignificantly. More analysts now trust management’s strategy and execution capabilities, which in turn enhance GLCs’ appeal among fund managers.

• The biggest areas of improvement have been inmanagement execution ability, management strategy and investor relations.

• The survey provides colour to GLC share priceappreciation over the past 4 years: the best performing survey companies have tended to be linked with superior share price performance.

Exhibit 22: The Six Metrics Questions Of Broker Survey

GLC Broker Survey

Every year, PCG polls sell-side analysts to gauge the markets’ perception of G20. This GLC Broker Survey narrows-in on six management and investability metrics. Quantitative scores are then given to each GLC based on the sum of analyst feedback. The six metrics and corresponding questions asked are as follows:

1. Trust and execution: Do you trust management to add value to the business?

2. Strategy and targets: Are you positive on management’s strategic game-plan and the quality of KPIs?

3. Relative market position: How far behind is this GLC compared to best-of-breed local or regional peers? Is this GLC getting left behind?

4. Investor relations: Is IR providing you with adequate/timely information and face-time?

5. Guiding expectation: Do you think management provides adequate/accurate guidance in managing your Earnings Per Share (EPS)/Dividends Per Share (DPS) expectations?

6. Investment appeal: What is the estimated institutional client weighting for this stock?

Exhibit 23: Percentage Of G20 Receiving Positive “GLC Broker Survey” Feedback

0

10

20

30

40

50

60

70

80

90

100 20112010

+50%20092008

Trust & execution

Strategy &targets

Marketposition

Managingexpectations

Investmentappeal

Investorcommunication

4x

+90%+60%

Source: “GLC Broker Surveys” from 2008 to 2011, PCG Analysis

Note: Market position, managing expectations and investment appeal scores are not available for 2008 due to changes in scope since the 2009 survey. 2008 figures are based on the survey conducted in December 2007 and published in March 2008.

pg 24

Page 26: transformation programme

b. Benefits To Stakeholders

GLCs continue to increasingly deliver strategic value to its various stakeholders – employees, customers, suppliers/vendors and the community at large.

The strong revenue growth enjoyed by GLCs directly benefit all key stakeholders in the Malaysian economy. Based on Exhibit 24, for every RM100 in external revenue generated by non-bank GLCs firms in FY2011, RM10 ultimately went towards employees as wages, RM3 as corporate tax to the Government, debt-holders received RM2 as interest payments and RM6 went to shareholders as dividends. Some RM79 went to the rest of economy for opex (e.g. to suppliers), energy (as fuel costs) and Independent Power Producers (IPPs) as capacity payments.

Exhibit 24: Non-Bank G20 Contribution To Stakeholders As A Percentage Of Revenue, FY2011

3 Government (as tax)

10 Employees (as wages)

2 Debt-holders (as interest)

6 Shareholders (as dividends)

4 IPPs (as capacity payments)

15 Energy (as fuel costs)

Others (as operating cost)

60

Source: PCG, Companies Annual Reports

Customers

GLCs have been offering lots of products and services that have positive impact on the lives of consumers. As a result, GLCs have to date won numerous product and service awards. (See Appendix D for the list of product and service awards received by G20 in 2011 and 2012).

GLCs have also developed various 1Malaysia products and services to provide greater benefits to their customers (See Appendix E for the list of products and services provided by G20).

Employees

G20 currently employ almost 360,000 employees and was a net creator of 16,210 jobs in 2011. GLCs have also continued to focus on employee welfare, with the non-executive salaries growing by 7.5% p.a. on average from 2007 to 2011, higher than the national average of 5.4% p.a. G20 have also ramped up on human capital development

by spending RM315m on training & development in2011, compared to RM127m in 2004. This has created opportunities for skills upgrading and career progression, with 9,764 non-executives being promoted to executive level since 2004.

In general, G20 employee welfare has improved based on the “Study On Impact of GLCT Programme on Employees, February 2011”. (See Exhibit 27).

Exhibit 25: G20 Non-Executive Compensation From 2007 To 2011 (% Annual Growth)

0

2

4

6

8

10

7.5

5.4

Basic Salary

G20

National

Source: G20 Reporting

Exhibit 26: G20 Training & Development Costs From 2004 To 2011

0

50

100

150

200

250

300

350

127136

167

207 210 225

302315

0

500

1000

1500

2000

2500

‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11

Total Cost (LHS)

RM’m RM

Cost per Employee (RHS)

Training & Development cost per employee has almost a doubled.

9,764 non-executivepromoted to executivessince 2004.

Source: G20 Reporting

In the recent PCG 24 Meeting chaired by YAB Prime Minister, GLCs have collectively agreed to put in place an upward mobility scheme to help the non-executive employees and their children who have limited options to expand opportunities. It was also agreed that GLCs will implement a performance-linked long term incentive plan for all employees.

Non-executivesalariesgrew7.5% p.a.

(vs.nationalaverageof5.4%)from2007-2011

GLCnetcreatorof16,210 jobsin2011

Training&development

costperemployeehasalmostdoubled

9,764non-executive

promotedtoexecutivessince2004

pg 25

Page 27: transformation programme

Exhibit 27: Study On Impact Of GLCT Programme On Employees, February 2011

Perception (based on survey results)

Rea

lity

(bas

ed o

n d

ata)

Worsen Unchanged Improved

Wor

sen

Unc

hang

edIm

pro

ved

T&D

T&D

R&B O

C

O : Organisational Relationship Dimension

R&B : Rewards and Bene�ts Dimension

T&D : Training & Development Dimension

C : Caring Dimension

This study has concluded some positive key findings with regards to employee and employer relations in GLCs, are as follow:

1. Organisational Relationship dimension (O)• G20hasalowattritionrateof5%from2004to2011,whichiswellbelowthenationalaverageof13.8%.• However,lowattritionmaynotnecessarilybepositive,ifthosestayingarenotengagedbutonlymotivatedby

job security or good benefits.

2. Rewards and Benefits dimension (R&B)• SalariesofG20employees,especiallyatlowerlevelshaverisenfasterthanthenationalaverage,wherethe

average basic salary for non-executives rose from RM1,971 per month in 2004 to RM2,901 per month in 2011, which is equivalent to CAGR of 5.7% with most growth in recent years.

• Theaveragebasicsalaryforexecutives(nextlevelabovenon-executives)rosefromRM3,309permonthin2004 to RM4,155 per month in 2011, which is equivalent to CAGR of 3.3%, just above inflation rate.

3. Training & development dimension (T&d) GLCs have always been committed to their employees’ training development and career progression:

• Thetotaltraininganddevelopmentcosthasgrownby13.9%p.a.fromRM126.5min2004toRM314.5min2011. The total training cost per employee has grown by 11.5% p.a. from RM1,067 per person in 2004 to RM2,045 per person in 2011.

• Thepromotionrateofnon-executivestoexecutivelevelhasincreasedovertheyears,accompaniedwithanincrease in average salary of 40% from 2004 to 2011, particularly in the banking sector.

4. Caring dimension (C) GLC employees have enjoyed increased benefits, especially on ‘family-related’ areas such as medical coverage,

hospitalisation and extended maternity coverage with child care support activities being provided. In addition, sexual harassment policies are already in place to protect the employees’ well-being.

pg 26

Page 28: transformation programme

Vendors And Suppliers

Supporting Local Suppliers

There has been an increase of procurement opportunities given to local suppliers. To date there are 52,262 local suppliers already being awarded contracts by G20.

GLCs are actively participating in SME Corp’s Green Lane Policy for innovative companies and 1-Innocert certification programme. Currently,

16 1-Innocert companies have been awarded contracts by G20.

Vendor development Programme

G20 through their various vendor development programmes have supported 1,803 vendors since 2004, of which 314 vendors have graduated to date, having developed the requisite level of skills to compete on their own.

TM’s VDP sees strategic initiatives being implemented to develop high performing Bumiputera vendors. It includes the graduation of over 500 companies in

stages from 2012 to 2014 where high performing graduates will have the potential of becoming preferred vendors to TM.

The VDP programme in Boustead aims to create a pool of successful vendors with excellent capabilities in the

field of ship building and repair activities, and supply and manufacturing of maritime defense related products.

Under the concession agreement between Pharmaniaga and Ministry of

Health, Malaysia, Pharmaniaga is responsible to nurture vendors which are called adoption companies under their VDP. In the long run, it is to transform them to become large scale companies with the ability to stand on their own.

As to date, 438 companies have been appointed under the TNB Bumiputera Vendor Development

Programme. They will be provided business training, guidance and development under the programme.

developing Entrepreneurs

GLCs have also participated actively in developing entrepreneurs through various programmes which include partnerships with other entities.

The Celcom Bumiputera Entrepreneur Development Programme is to support local graduates especially Bumiputeras to become skillful, competitive entrepreneurs. The programme is Celcom’s effort in growing the

number of Bumiputera retailers in the telecommunications industry. In this joint programme with PUNB, Celcom’s role is to nurture participants’ entrepreneurship development while PUNB provides funding for the participants.

THP’s Vendor Development Initiatives (VDI) is aimed at developing entrepreneurs from the local communities. Through this

programme, more than 100 entrepreneurs from the local communities are given opportunities to participate in THP’s business activities.

52,262LocalSuppliers

AwardedContracts

314Vendors

Graduated

pg 27

Page 29: transformation programme

Community

GLCs continue to undertake various programmes to support society at large and the on-going PCG programmes continue in earnest such as school adoption under Pintar Foundation, improving the livelihood of the lower income group under Yayasan Sejahtera and enhancing graduates’ employability in the GEMS programme.

Pintar Foundation is a school adoption programme by GLCs and other corporate entities to improve educational outcomes of students in the underserved communities, which are mainly in the

rural areas. To-date, 292 schools have been adopted (including graduated schools), benefiting more than 450,000 students. In 2011, 11.2% of PINTAR students scored straight As for UPSR, compared with the national average of 9.5%.

Yayasan Sejahtera was created with the backing of PCG to alleviate hardcore poverty in Malaysia. The programme

seeks to aid vulnerable communities create better lives for themselves by providing access to necessary tools, skills and infrastructure. To-date Sejahtera has reached 4,690 families with a total of 10 GLICs and GLCs involved in the Sejahtera projects.

The Graduate Employability Management Scheme (GEMS) is a capacity building initiative developed to equip unemployed

graduates with the necessary skills and experience that will enhance their employability. GEMS have benefitted 8,000 graduates. To-date, 12,757 unemployed graduates have been trained and given work opportunities under the GEMS and other similar programmes supported by GLC (i.e. GREEN and SL1M Programmes).

Since 2004, G20 have awarded 46,768 scholarships and financial assistance amounting to approximately RM433m to Malaysians studying locally and abroad.

12,757GraduatesTrained

46,768ScholarshipsAwarded

RM433mFinancialAssistanceProvidedForStudents

4,690FamiliesBenefitted

292PINTARSchools

Adopted450,000+Students

Benefitted

pg 28

Page 30: transformation programme

c. GLCT Programme Activities

Progress Of 10 Initiatives

The 10 initiatives of the GLCT Programme, of which 8 were further detailed in the “Initiative Books”, contains many best practices and are significant to value creation of the company. By adopting the guidelines in the Initiative Books, GLCs are closing their gaps in best practices and becoming more competitive.

Subsequent to the launch of the Initiatives Books, many workshops and meetings to train, share best practices and problem solve common challenges were conducted through what is known as the various Initiative Circles. These Initiative Circles also provided a platform for the GLCT Programme to ensure full institutionalisation of the Initiatives at GLCs, and for GLCs to advance and update some of the thinking and guidelines in the GLCT Initiatives. In view of the value that the Initiatives bring, it is important for the GLCT fraternity to continue to work together to share best practices and any new developments on each Initiative. Below are highlights on what has been happening on some Initiatives at the Programme level.

Malaysian Directors Academy (MINDA) Strengthening Directors Capabilities, December 2006

As part of the GLCT Programme’s Initiative to strengthen directors’ capabilities, The Malaysian Directors’ Academy (MINDA) was established in December 2006, with the aim of enhancing board performance by equipping directors of GLCs with world class knowledge, skills and mindset. The target audience for MINDA’s premier programmes (i.e. “Building High Performance Directors” and “Chairman’s Forum”) are the GLCs’ Chairmen, CEOs and directors. These programmes have also been progressively opened to directors of non-GLC public listed companies and multinational companies to create better diversity, and this has been met with positive response.

To ensure high quality programmes are produced, MINDA has partnered with leading foreign institutions and business schools such as IMD, INSEAD and Harvard specialising in design and deployment of programmes at the director’s level. MINDA’s programmes also utilise both international and Malaysian case studies for discussions and dialogues to provide breadth (through international cases) and relevance to local issues and developments (through Malaysian cases). The programmes have so far been very well received with ratings averaging above 4 on a scale4 of 1 to 5.

MINDA’s early successes has led to the expansion and customisation of their programmes to cater for MoF Inc companies as well as a collaboration with NAM Institute for the Empowerment of Women Malaysia (NIEW) to conduct “Women Directors Onboarding Training Programmes”.

To date, a total of 224 directors have successfully completed MINDA programmes. MINDA aims to continue building and nurturing directors from GLCs and non-GLCs to help enhance their competitiveness and move towards becoming regional champions.

Achieving Value Through Social Responsibility (Silver), September 2006

The Silver Book lays out guidelines on how GLCs can contributed to the society in a responsible manner and create a positive impact for their business and for society. It also assist GLCs in clarifying and managing social obligations in the most efficient and effective manner in line with best practice framework within the industry.

The key initiatives for Silver Book in 2011 were:

• CapacityBuildingProgrammeonimprovingStakeholderManagement

The Silver Book Circle held 2 workshops to improve GLCs practices in stakeholder management. The Action Learning portion included engagement sessions with

4 The participants were asked for their feedback on the programme on a scale of 1 (very poor) to 5 (excellent)

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relevant stakeholders that led to findings on sustainability issues considered important by both stakeholders & GLCs, which are energy efficiency, transparency,attracting foreign investment, climate change and health &safety.

The workshops also enhanced GLCs’ ability to develop its own Corporate Sustainability Circle (CSC) materiality matrix5 by prioritising sustainability issues that is relevant to the organisation with action plans.

• ManagingClimateChangeImpactSurvey

Following up from the Climate Change dialogue in October 2010, a survey on “Managing Climate Change Impacts to GLCs” was conducted with 16 GLCs participating. 5 key areas were highlighted for improvement and implementation: Governance, Strategy, Target &Initiatives,Risks&OpportunitiesandEmissionsData.

Review and Revamp Procurement Practices (Red), April 2006

The Red Book lays out guidelines for GLCs in terms of improving procurement practices to transform GLC performance. One critical area of opportunities for GLCs, is to evolve from a normal supplier GLC relationship which is typically transactional to become strategic partners where vendors and GLCs coexist with very significant value creation from both sides. This is in line with strategies of leading global companies which proactively manage their suppliers by establishing strategic partnerships with their suppliers.

To-date, the 2 key initiatives, with the aim of enhancing GLC supplier relationship and to develop a stable and competitive supplier base have been:

• Procurement opportunities to support local suppliersand Government initiatives. Active engagement with

SME Corp and TERAJU has been conducted to intensify opportunities of 1-Innocert6 and TeraS7 to participate in G20 procurement activities.

• VendorDevelopmentProgramme(VDP),whereby localvendors have been developed to acquire the skills and competency to compete on their own.

The level of adoption of other Red Book initiatives is best exemplified through various efforts by GLCs. Some of the examples are as follows:

• TNB has launched the 2011 edition of the “Bookon Procurement Policies and Procedures” (PPP) in June 2011, with improvement in 14 guidelines and 3 procedures. These serve as a general guideline for divisions and wholly owned subsidiaries to realise the company’s business objectives, and also to increase corporate transparency, enhance corporate governance and implement best business practices.

• ForTM,in2011,keyelementsoftheProcurementEthics8 were included in the “Code of Business Ethics” e-learning module, emphasising ethical conduct in dealing with suppliers and business partners. Examples of possible conflict of interest scenarios in a procurement process are provided for added clarity and better understanding.

Activities under the Red Book are currently being handled by the Procurement Circle consisting of G20 Chief Procurement Officers (CPOs) and supported by PCG Secretariat. It has been agreed that the Procurement Circle will meet twice a year with the chairmanship role being rotated on a yearly basis. There are also plans to properly transition the Red Book Initiative to a proper Natural Born Owner (NBO)9 with an established governance structure. This is to ensure continuity of the circle beyond 2015.

Moving forward, the Procurement Circle is having more proactive engagement in terms of participation and contribution of ideas towards becoming regional champion through better procurement practices. In order to achieve this, key improvement areas or work streams have been identified. One of them is the Procurement Enhancement Sub Group in which the ambition is to begin transforming the procurement organisations into a powerful, competitive entity which adds value far beyond cost savings.

5 The CSC materiality matrix defines and prioritises sustainability issues against their importance to each company’s stakeholders, in order for the company to develop action plans to address the relevant sustainability issues with their stakeholders.

6 1-Innocert is the certification programme used to recognise and certify innovative SMEs.7 TeraS is a special scheme to develop high performing Bumiputra companies.8 Rule and regulations with regards to procurement ethic to promote transparency and accountability.9 NBO is an entity (e.g. an organisation, department, group of practitioners etc.) who are actively involved in or frequently use the Initiative subject matter as part of their day-to-day work. Therefore, this

entity would naturally be a good owner of the Initiative to ensure the GLCT fraternity continue to work together to share best practices and any new developments.

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Strengthening Leadership Development (Orange), December 2006

Orange Book is about the strengthening of leadership and talent development in GLCs which is key to ensure the robustness of GLCs in the long run. The book advocates a holistic approach that binds the business strategy between line business and HR partnerships to develop leaders and talent within the organisation.

Amongst the recent key projects and achievements are as follows:

• The6th Leadership Development Circle (LDC) was held in March 2012 with the theme – “Leadership Development In Context of NEM – GLCs as Leadership Factory for the Nation” with the following key takeaways:o GLCs to work towards achieving industrial harmony

and enhancing labour relations between the employees and unions

o GLCs to become a leadership factory for the nation

o GLCs to continue to build a high performing workforce

o GLCs to help the country in leading the implementation of minimum wage and retirement age policies

• TransitioningtheOrangeBooktotheHRCircleaspartof the institutionalisation platform on to a NBO is to be achieved by the end of 2012.

• Moving forward, there are two major exercises thatneed to be conducted – Leadership Development Audit (LDA #3) and High Performing Work Force (HPW #1). LDA measures the leadership gaps within the organisation, whilst HPW is to increase and track the impact of human capital on financial performance of the organisation.

Intensifying Performance Management (Blue), August 2005

The Blue Book on Intensifying Performance Management was the very first of 10 Initiatives in the GLCT Programme. It remains as a cornerstone initiative as it introduced guidelines on Performance Contracts for Senior Management, Performance Linked Compensation (PLCs), Headline Key Performance Indicators (KPIs), and a framework for a Value Based Performance Management (VBPM) system. These guidelines were key in helping to develop a performance culture at GLCs.

Recent developments in the Blue Book initiative include:

• ShareAwards

Current Blue Book guidelines only state that GLCs should use cash and/or shares as performance bonuses to motivate senior management behaviour and performance. Where GLCs are in a position to do so, long-term incentives can be based on shares (share options, share-appreciation rights or other forms of share-based instruments).

It is now a trend to move away from share options towards share awards or hybrids, as they are found to be less dilutive and more tax efficient. At the recent PCG 24 Meeting in May 2012, it was agreed that Blue Book will be updated with guidelines on the issuance of share awards as a long term incentive plan and provide a framework for its implementation.

• Non-ExecutiveDirectors’Remuneration

Current guidelines state that Non-Executive Directors’ (NED) total compensation should be set at least at or around the 50th percentile (P50) of NED compensation in peer companies. Currently approximately 60% of G20 have NED fixed fee which is below market average. It was agreed at PCG24 that all GLC Boards are to:o Evaluate NED remunerationo Ensure default minimum position at P50 for peer

group as per Blue Booko Adjustments if any to be completed by end 2012

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Enhancing Operational Efficiency and Effectiveness (Yellow), September 2006

Yellow Book provides guidelines to assist GLCs in enhancing operational effectiveness and efficiencies to achieve continuous improvements within the organisation.

The two major initiatives that have been undertaken are the “GLC Innovation Project” and the “GLC Customer Service Project”, with various activities needed for follow through with GLCs. More information is given in Chapter 7: Moving Forward Towards 2015.

Programme Man days

PCG Secretariat has organised 153 days of Programme sessions, syndication, briefing, discussions, workshops and circles in 2011. This translates to 3,952 man days of participation from GLICs and GLCs.

Since the launched in 2005, 1,162 Programme days have taken place, amounting to total of 19,243 man days of participation from the various attendees, ranging from CEOs to operational line managers.

A high proportion of these activities can be attributed mainly to the increase in activities under MINDA, Silver Book, Red Book, Orange Book, Blue Book and Yellow Book a programmes, including the recent GLC Open Day event 2012.

GLC Open day 2011

NGOs, entrepreneurs and social activists discussing wide-ranging issues from the new corporate DNA

for GLCs to the social media phenomenon and the limit of social entrepreneurship. CEOs were also featured at the ‘Spot Light Corner’ where visitors had the chance to engage with the CEOs. A myriad of exciting activities for the family were offered including a treasure hunt, children’s colouring competition and e-Peraduan for all ages with attractive prizes offered. The 3-day event was a significant success, attracting over 30,000 visitors. A total of RM11.2m worth of transactions were done and number of business/supplier enquiries, registrations and proposals totaled 412. More than 7,400 resumes were submitted and scholarship applications totaled 960. More than 50,000 entries were recorded in promotions, games and activities. Based on feedback from around 3,000 respondents, 80% of them gave an overall rating for the event of above 7 out of 10.

In reaching out to stakeholders, PCG organised the inaugural GLC Open Day event in June 2011.

The rationale of holding the Open Day was to reach out to all Malaysians in showcasing how GLICs and GLCs have contributed towards the development of the nation’s economy and in so doing, touched the lives of every Malaysian. The objective was to communicate and impart to the public at large the great strides and progress that the 5 GLICs and G20 have made and their continuous efforts towards creating value, sharing that value and delivering benefits to the Rakyat.

The Open Day featured public forums chaired by GLC CEOs to discuss various current issues with participation from prominent personalities,

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6 Towards Transforming Malaysia

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Chapter Highlights

• GLICs and GLCs continue to invest andprovide on-going support for various nationaltransformationprogrammes.

• They have been executing on their 5 roles insupport of NEM, which includes deliveringon their various transformation, turnaround,restructuringandgrowthprogrammes.

• Asa resultof theseeffortsG20have returnedRM62b individendsandpaidRM40b in taxesfrom2004to2011.

• Theyhavebeenactively investing inNEIsandcontributingtonationalcorridorsdevelopments.Since the Programme started, GLCs haveinvestedRM92bdomestically.

• Theyhavealsoformedsuccessfulpartnershipswithnon-GLCprivatesectoranddivestednon-coreandnon-competitiveassets.

• Among the key milestones from 2011 untilto date are the strategic divestment of PosMalaysia, acquisition of Kim Eng Holdings byMaybank,privatisationofPLUSthroughajointacquisitionbyUEMGroupandEPF,completionofmandatorygeneralofferonSPSetiabyPNBand the recent divestment of Proton to DRB-Hicom.

• GLCs have also been actively supporting theGTPandETP.G20havecommittedRM7.4btodatein13EPPs.

• InsupportingtheBumiputeraagenda,PNBandKhazanah have also identified five companieseach that will undergo a divestment processtoBumiputeracompanies inorder to increaseBumiputeraparticipationintheeconomy.

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NKRA – “cost of living” was announced to address another pressing issue of inflation and rising daily cost of living.

Following the first year of implementation, majority of the NKRAs achieved more than 100% of their targets. GLCs have been actively supporting the NKRAs since its launch and have in part, contributed to this achievement. Selected GLC contributions towards the 7 NKRAs are as follows:

a. Government Transformation Programme

The GTP is among the first few programmes launched by the Prime Minister of Malaysia after he came into office. It is an ambitious, broad based initiative aimed at addressing key areas of concern to the people of Malaysia. 6 National Key Results Areas (NKRAs) were initially identified following months of evaluating the people’s demands and the most pressing issues of the Government. In July 2011, seventh

Reducing Crime

• Safe Cities initiatives in Ara Damansara, Mutiara Damansara (Selangor) and Nusajaya (Johor)

• Extension of safe cities initiative which integrate CCTV to 999 services• Home Security System packaged together with mortgage loan

Fighting Corruption

• Signatories of Corporate Integrity Pledge • Implementation of Whistle Blower Policy

Improving Student Outcomes

• 15 GLCs are participating in PINTAR Foundation programme• Supply of vitamin in selected schools worth RM20m for over 24 months

Raising Living Standards of Low Income Household

• Participate in Yayasan Sejahtera programme

Improving Rural Basic Infrastructure

• Supply electricity to 27,004 rural houses• Established 174 Community Broadband Center and 740 Broadband Community Libraries

Improving Urban Public Transport

• Integrated Touch ‘n Go ticketing system for LRT and RapidKL buses• Planning of MRT route and station in Mutiara Damansara

Addressing Cost of Living

• Provision of utilities allowance, schooling assistance and festive token to low income workers

• RM200 salary increase for plantation workers

6 Towards Transforming Malaysia

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b. Supporting The New Economic Model (NEM)

In March 2010, the Prime Minister of Malaysia, launched the NEM. The goals of NEM are to transform Malaysia into a high-income nation by 2020, ensure that all communities fully benefit from the wealth of the country and to operate on an economically and environmentally sustainable basis, so that future generations are not compromised.

With the introduction of the NEM, there was a need to clearly articulate how the GLCT Programme should be aligned to this national agenda. On 6 May 2010, PCG announced 5 important roles on how GLICs and GLCs will support NEM. The 5 roles will also provide the GLCT fraternity with a common understanding, language and frame on how to reinforce the NEM. GLICs and GLCs have to-date been executing on their 5 roles and are achieving some significant results.

Role 1: Stay The Course In Executing The 10-Year GLCT Programme

The GLCT Programme, which aims to raise the performance of all GLCs and create regional champions, should be continued as it provides strategic and sizeable contribution to NEM and Malaysia’s overall efforts to become a high-income nation by 2020.

Exhibit 28: 5 Roles Of GLICs And GLCs In Supporting NEM

Part of staying the course involves executing and institutionalising on the 10 GLCT Programme Initiatives. As described in Chapter 5, much work has been done on this for each initiative at the Programme level. GLCs have also been executing on their various transformation, turnaround, restructuring and growth programmes.

As a result of these efforts, G20 have returned RM62b in dividends and paid RM40b in taxes from 2004 to 2011.

Role 2: Relentless drive To Become Regional Champions

GLCs need to pursue regional championship and continue to execute regionalisation strategies. While this applies slightly differently to various GLCs at different stages of development and business models, all GLCs are required to be clear as to how to confront and take advantage of regionalisation and globalisation trends. There is a need to leverage on the ASEAN platform with the onset of increased liberalisation. To date, several G20 have established an overseas presence and are well on track towards becoming regional champions, whilst other G20 are building capacity to reach this level within the short to medium term.

G20 have expanded its regional footprint to 40 countries where 33% of the footprint is concentrated in ASEAN region.

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Exhibit 29: Countries With G20 Presence

1

811

6

5 4

7 7

2

3 3

6

1

3

3

2

3

132

4

2 1

1

1

1

1

2

1

2

2

1 1

1

2

1

1

1

1

5 2

Exhibit 30: G20 Footprint In ASEAN Region

In its constant pursuit for growth, GLCs have taken various initiatives to strengthen its business operations in the ASEAN region. Such measures are to capitalise on the arising opportunities and the increasing growth potential of these markets which will ultimately help optimise the value delivered to stakeholders.

To date, GLCs’ representation in ASEAN is significant. In summary, RM27.0b or 15% of total G20 revenue in FY2011 has been captured from the ASEAN market. Meanwhile, their ASEAN assets stood at RM224.1b in the same year. G20 also employ 77,677 employees in ASEAN countries or 22% of its total workforce and have 1,509 offices and branches in the region.

Examples of GLCs which have grown in the ASEAN Region are CIMB and Maybank. They are in the forefront of the financial services sector within the ASEAN Region through their acquisition of strategic stakes in banking institutions in the region.

Vietnam

Thailand

Indonesia

Philippines

Singapore

Brunei

Myanmar

Cambodia

3

5

4

3

118

4

2

denotes number of G20 in the country, more details in Appendix F.Source: G20 Reporting

Source: G20 Reporting

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Below are some examples of the recent regionalisation initiatives by G20.

Company description

• Restart its expansion regionally through the acquisition of PT Bank Ina Perdana in Indonesia which will be converted into an Islamic Bank.

• Axiata has unique regional footprint across 10 countries, addresses a target population of 1.7b.

• Regional presence in Indonesia (Takaful business) and Sri Lanka (Islamic banking).

Continue regional expansion in pharmaceutical sector as Pharmaniaga Bhd has operations in Indonesia and Vietnam.Heavy Industries Division to further expand their business in shipbuilding by exploring markets in Middle East, Asia Pacific and African regions.

New compound fertilisers plant in Medan to cater to Indonesian palm oil plantations. Have regional offices in Singapore, Indonesia and Philippines. To be top 5 pharmaceutical players in the region.

With the proposed acquisition of 60% of BoC in Philippines, CIMB is now a regional universal banking franchise that covers 99% ASEAN population. Set up the CIMB ASEAN Research Institute (CARI), an independent research institute dedicated to promote ASEAN economic and social integration.

• MAHB increasing its international presence through the following overseas ventures: India, Turkey, Maldives.

• Launch of new regional airline in the pipeline with alliances and partnership with other airlines.

• Continue to look at countries such as Australia, Vietnam and India for opportunities (promoting success of KL Sentral).

••

To be Regional Financial Services Leader by 2015.Maybank has grown through M&A in the ASEAN region with recentacquisitions are MCB Pakistan, Bank International Indonesia and Kim Eng. Footprint in 17 countries and represented by 2,200 offices.

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Company description

•••

Sime Darby has more than 50% of profits from businesses outside Malaysia. Landbank expansion for oil palm and rubber in West Africa and Indonesia.Largest producer of certified sustainable palm oil.

• THP maiden regional expansion in Indonesia with approximately 14,180 ha of plantation land.

• VADS Bhd continues to enhance its BPO services footprint regionally via PT VADS Indonesia.

••

Ventured into Indonesia to construct the first highway project in West Java.UEMC and Opus Properties through joint venture have been awarded to undertake infrastructure development service township at Hasanpur Village, Uttar Pradesh, India.

Role 3: Pursue New Economy Investments In Line With NEM

GLCs need to pursue NEIs as catalyst in these growth sectors and help the country towards boosting its GNI. To date, G20 have made RM136b of capital investments, of which RM92b have been domestic investments. Recent selected examples of NEIs by GLICs and G20 include:

Company description

• Providing end-to-end business solutions such as WAN networks, healthcare solutions, M2M, VSAT and other large scale projects. This business targets vertical industries like healthcare, education, Government and utilities.

Development of Mutiara Damansara commercial center and indoor theme park.6 Second-Generation Patrol Vessels with Combatant Capabilities valued at RM9b.Construction of Royale Bintang Damansara Hotel, Royale Resort and Spa Cherating and Royale Bintang Penang.

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Company description

Collaboration with foreign biotechnology team of scientists to develop the first locally manufactured biosimilar product.Strategic Reform Halal Pharmaceutical initiatives for international standards and liberalisation.To sustain CCM’s leadership role in the Halal industry and make Malaysia Global Halal Hub.

••••

LEGOLAND Malaysia theme park.Edutainment theme park KidZania.Pinewood Iskandar Malaysia Studios.Acquisition of Acibadem, a leading private healthcare services provider in Turkey.Joint investments with Temasek for the development of RM30b GDV projects in Singapore and Iskandar Malaysia.

••

Developing Maintenance, Repair and Overhaul (MRO) services. MAS Aerospace Engineering (MAE) and GMR Hyderabad International Airport Ltd. (GHIAL) has also set up a 50:50 joint venture Airframe MRO company in Hyderabad. This further strengthens of MAE’s foothold in MRO services by helping to open up of new markets and spurring demand for Malaysian-led MRO services.

• Co-leading Malaysia’s Bio-mass initiative with Felda (AIM, MIGHT) to examine new economic opportunities from bio mass.

• 6strategicclusters in theProperty sector– sports,healthcare&wellness,education,entertainment&leisure,logistics&retailandgreentechpark.

• TM is embarking on a strategic trust in content, services distribution and ICT that includes:o TM’s UniFi triple play and HyppTVo Content and Applications Hub – My1Content Portalo Online Value-Added Services (OVAS)o The Blue Lane Programme aims to nurture and harness home-grown

technopreneurs.

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National Economic Corridors

1. Northern Corridor Economic Region (NCER)

NCER, launched in July 2007, has recorded RM9.9b in private sector investments in 2011, up 62.8% from RM6.08b committed in 2010. Six new developments have been identified to be further explored in 2012 which are biotechnology, transportation-based manufacturing, paddy estate amalgamation scheme, pineapple farming, healthcare travel and shared services among companies in NCER.

G20 especially Sime Darby is playing a significant role in contributing to the development of NCER. Sime Darby is collaborating with MARDI to produce high quality paddy seeds and have recorded 7mt/ha yield during the third season of planting as compared to national average yield 3.5mt/ha.

This corridor is also designed to enhance the well being of the people through targeted social economic activities that will raise income, skill set and knowledge level. Sime Darby Nursing and Health Sciences College has been working with Northern Corridor Implementation Authority (NCIA) to help students to acquire skills that will enable them to find employment in the healthcare and hospitality industry. NCIA, in collaboration with Silterra and Universiti Malaysia Perlis, is also contributing RM2.17m to produce a pool of wafer fabrication technology graduate trainees to meet industry needs.

2. Iskandar Malaysia

Since its launch in 2006, Iskandar Malaysia has progressed rapidly, with several key developments completed and many more nearing completion. Cumulatively, as of 2011, Iskandar Malaysia has recorded a total committed investment of RM77.82b, surpassing the target set for the first phase of development. About 40% of the total is from foreign investment and more than RM30b have been realised.

Some key developments that are completed in 2011 are Rumah Iskandar Malaysia and Newcastle University Medicine Malaysia. There are more developments to be launched in 2012 such as:

0

10

20

30

40

50

60

70

80

6.3 6.3

21.8

14.5

26.7

6.8

8.2

5.1

21.7

11.9

7.1

5.85.8

5.5

11.3

25.8

41.8

55.6

69.5

16.5

9.1

23.7

RM’b

ManufacturingUtilitiesPropertiesGovernment

2006 2007 2008 2009 2010

Exhibit 31: Cumulative Investment From 2006 To 2010

Source: Iskandar Malaysia 5-Year Progress Review, December 2011

• Educity

o Netherland Maritime Inst of Technology

o University of Southampton

o International Student Villageo Marlborough College o Multi-Varsity Enterprise Complex

• PuteriHarbourPhase2

• FamilyIndoorThemePark

• LegolandMalaysia

Much more needs to be done to achieve its 2025 target of having population of 3 million people, 1.46 million jobs, cumulative investments of RM383b over 20 years and a GDP of USD93.3b. Several key imperatives have been identified as the way forward for Iskandar Malaysia such as in the leisure and tourism, education, healthcare and infrastructure.

Role 4: Collaborate And Co-Invest With Private Sector

This role of collaboration and co-investment between GLCs and the non-GLC private sector aims to spur the economy and quicken the journey to become a high-income nation by leveraging each other’s strengths, optimising revenues (i.e. lessen duplication) and help both GLCs and the private sector to pursue new high value industries. It creates more opportunities for the private sector to participate and contribute whilst enabling GLCs to tap into the entrepreneurial skills and efficient supply chains of the private sector.

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Some examples of collaboration and co-investment undertaken by G20 are as follows:

Company description

• Strategic partnership with Bank of East Asia for Islamic Banking market in China.

Celcom Axiata infrastructure network sharing with DiGi with combined savings of RM2.2b over 10 years.TM entered into a service agreement with Celcom Axiata to provide High Speed Broadband (HSBB) Services and access to Celcom.Celcom Axiata signed teaming agreement with Broadcast Australia for RM2b digital terrestrial television broadcasting (DTTB) project bid.

Collaborate with Farihan Corporation Sdn Bhd through 80% equity participation by Bank Islam in launching Ar-Rahnu Islamic pawn-broking outlet on micro-credit financing market for entrepreneurs. Takaful’s collaboration with DiGi to provide agents and distributors with mobile voice and broadband solutions. Tie-up with UK first Shariah-compliant, European Islamic Investment Bank (EIIB), for UK and Europe markets.

51% acquisition in MHS Aviation Berhad for air transportation, flight support &trainingandtechnicalservicestooilandgascompanies.JV between Boustead DCNS Naval Corporation and DCNS S.A. for collaboration in industrial and engineering activities.

• CCM’s development in infrastructure for Halal Pharmaceuticals will entail collaboration between GLCs and the private sector on fertiliser sourcing, manufacturing and supplies.

CIMB Bank’s Business Advisory to provide advisory services to SMEs on financial instruments via SME programmes and seminars.Strategic collaboration with Tune Money involving joint branding/marketing and product bundling. CIMB Group owns 25% of Tune Money.

Joint Venture with Nagamas International for the development of Yongzhou Lingling Airport, China.Consortium with Amona Group, Perunding Zaaba and LKMD Architecture for the upgrading of Tehran’s Imam Khomeini International Airport.Collaboration with Perunding Zaaba and LKMD Architecture for the upgrading of Caticlan Airport, Boracay, Philippines.

• Malaysian Airline System Berhad, AirAsia Berhad and AirAsia X Sdn Bhd to enter into a Comprehensive Collaboration Agreement to explore areas of mutual need to realise savings and boost efficiencies in areas of procurement, aircraft component repairs, training, technical and operational efficiency, as well as mutually championing common industry issues.

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Company description

MRCB-DMIA JV to redevelop Government’s land in Brickfields, Kuala Lumpur known as Little India project.MRCB-Pelaburan Hartanah Berhad JV is finalising terms with the Government of Malaysia to develop Penang Sentral.Joint Venture with Ekovest Berhad on the River of Life as Project Delivery Partner (PDP) to commence the 10.7km river beautification and cleaning up of the Gombak river and Klang river in Kuala Lumpur.

Collaboration with Mitsui Engineering and Shipyard of Japan to evaluate the use of Empty Fruit Bunch (EFB) as feedstock for bioethanol production.Strategic joint venture with South Korea’s AK ChemTech to create synergies betweenEmery’sglobaldistribution&market intimacyandAKChemTech’sadvanced technology in product development and applications know how.Strategic joint venture with Europe-based ERCA to increase presence in the global ‘home and personal wellness’ markets across Europe, South America and Asia.

• THP has ventured into strategic partnerships with several private companies to procure fertilisers for plantation efficiencies and value to be translated into positive returns.

Under the partnership with the Government, TM has signed with Maxis, Packet One and Celcom Axiata (MoU) to provide open access HSBA services to the industry.Collaboration with PERNEC to build, operate and maintain TM Wi-Fi zones / hotspots nationwide.

• The Ministry of Health (Malaysia) has appointed UEM Group – Najcom to develop and maintain the 600-bedded Woman and Child Hospital through Public Private Partnership (PPP) Build, Lease, Maintain and Transfer (BLMT) concept.

Role 5: Continue Focus On Core Operations: Level Playing Field And Exit Non-Core And Non-Competitive Assets

This role is to spur economic growth, promote further dynamism of entrepreneurship in Malaysia and to achieve more optimal allocation of resources at country level. There are cases whereby GLCs need to continue to remain in businesses of national strategic interest.

On level playing field, GLCs have to compete equally with private sector. Some examples in the past have shown that not all bids are won by GLCs.

GLCs constantly review and streamline portfolio for better focus and value creation, evidenced from investments (in core), outsourcing and divestments of non-core and non-competitive assets. Khazanah has 45 divestment transactions from 2004 to 2011 worth RM31.7b. Since inception, PNB has distributed more than RM90b in dividends to unit holders.

Among notable recent divestment by GLICs and GLCs have been Pos Malaysia and Proton. Sime Darby exited the oil and gas business by disposing its oil and gas fabrication yards in Pasir Gudang and Teluk Ramunia in Johor. TM divested its interest in TM Smart School while UEM has divested Pharmaniaga (pharmaceuticals) and Gapima (logistics).

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Khazanah and PNB are also in the process of divesting another 5 companies each to Bumiputera entrepreneurs as part of the Bumiputera Agenda. The Government expects GLCs to help institute a divestment process that is transparent and merit-based.

GLCs Contribution To ETP

ETP, launched in September 2010, targets to achieve a GNI per capita of RM48,000, investments totaling RM1.4 trillion and generate 3.3 million jobs by the year 2020. As of 2011, 110 projects were launched, 55% of the Entry Point Projects (EPPs) have taken off and over RM179.2b in investments have been committed.

G20 have committed to invest RM7.4b in 13 EPPs such as providing infrastructure for new power plants (RM4b), developing international cable systems (RM442m), building up medical centers (RM280m) and development of integrated complex in KLIA2 (RM486m) including developing Malaysia into a regional MRO services hub (RM192m), and formed a strategic partnership to build telepresence exchange (RM11m) and Netstorage facilities (RM268m).

Exhibit 32: Numbers Of EPPs Participated By G20, By NKEAs

0 2 4 6 8 10

Oil, Gas & Energy

Financial Services

Healthcare

Wholesale and Retail

Tourism

Business Services

Comm, Content and Infra

Palm Oil & Rubber

Agriculture

Education

Electronic and Electrical

Greater Klang Valley

Source: G20 Reporting

G20 are also contributing in all 12 National Key Economic Areas (NKEAs) through the implementation of 50 EPPs according to their sectors. For instance, CIMB and Maybank are actively involved in most of the EPPs under Financial Services NKEA. G20 plantation companies are also substantially contributing to Palm Oil NKEA by accelerating the replanting of oil palm, improving the fresh fruit bunch yield, improving worker productivity and increasing the oil extraction rate. Below are the selected contributions by G20 in 12 NKEAs. Initiatives (in bold and with value) shows G20’s committed investment in respective NKEAs.

1. Oil,Gas&Energy

• Investment in three new power plants (RM4b)

• Drilling activities in Berantai field

5. PalmOil&Rubber

• Usage of crop harvesting mechanisation to improve worker productivity

2. Wholesale&Retail

• KLIA2 Integrated Complex (RM486m)• Development of Big Box Boulevard in

Nusajaya Johor

6. Tourism

• Build a factory outlet in KLIA on 50 acres land with estimated cost of RM300m

7. Business Services

• MRO services (RM192m)• Netstorage facilities (RM268m)

4. Agriculture

• Paddy demo lot in IADA Penang to demonstrate 100% yield increase

3. Financial Services

• To become global hub for Islamic finance

8. Greater Klang Valley

• Beautification and cleaning up of Klang River

9. Electronic&Electrical

• Contributed in semiconductor fabrication technology to increase number of integrated circuit-design companies

10. Education

• Collaboration between researchers, industries and inventors to increase research capabilities

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c. Supporting The Bumiputera Agenda

Whilst there have been major achievements made for Bumiputera Agenda since New Economic Policy (NEP) implementation, there is still significant need to address existing imbalances with respect to income levels and ownership of economic assets. Despite being 65% of total households, Bumiputera community still lags behind: 77% Bumiputera constitutes the bottom 40% of household income earners and ownership of share capital (at par value) of limited companies stands at 23.09% in 2010 against target of 30%.

The GLCT Programme supports the development of the Bumiputera community (i.e. under one of its underlying principles on national development foundation) and GLCs have been actively supporting the agenda, e.g. RM81.6b (out of RM159.3b) procurement contracts were given to Bumiputera companies through a merit-based selection process and 203 Bumiputera vendors have graduated from VDP programmes.

Majlis Tindakan Agenda Bumiputera (MTAB) chaired by YAB Prime Minister, was formed to steward this agenda with TERAJU (Unit Peneraju Agenda Bumiputera) as the agency tasked to oversee its implementation.

Bumiputera Economic Transformation Roadmap (BETR) was launched in November 2011 to further enhance Bumiputera wealth creation through better education, enhancing the value of Bumiputera owned assets and increasing Bumiputera corporate ownership and control based on some principles (see inset box).

Exhibit 33: Casual Relationship Between Education, Income & Wealth

Source: Bumiputera Economic Transformation Roadmap

TeraS programme was developed to identify and facilitate 1,100 high

potential Bumiputera companies (currently 130 companies already selected) to help improve their business through merit-based access to opportunities.

Current GLCs Initiatives To Support BETR• 3areasexpectedofGLCstohelpBETR:procurement

contracts, divestment of non-core assets and outsourcing of business functions and services.

• Khazanah Nasional Berhad and Permodalan NasionalBerhad will identify and announce 5 companies each for divestment to Bumiputera companies, as per the mandate of MTAB. The process will be via open tender, merit based and expected to take place from the middle of this year.

• GLCshavepledgedRM63mworthofscholarshipsandfinancial assistance to the Yayasan Peneraju Pendidikan Bumiputera as part of education and capability building to deserving Bumiputera students.

• VariousGLCsarecurrentlyindiscussionswithTERAJUto establish potential areas for merit-based TeraS companies to participate in.

11.Comm,Content&Infra

• International cable system (RM442m)

• TelepresenceExchange(RM11m)

• Formation of Konsortium Rangkaian Serantau (24 telcos) to address bandwidth capacity and cost

GLCshavepledged

RM63mtoYayasanPeneraju

12. Healthcare

• Build medical centers in Ara damansara and desa Parkcity (RM280m)

• Project in Generic Pharmaceutical area with estimated investment of RM100m

Income

Wealth

Financial Assets

e.g.• Unit Trust• Zakat funds

Increase tertiary enrollmentskills specialisation

• Provide scholarships, �nancial assistance

• Divestment & outsourcing of non core business/assets

• Business opportunities

Drive equitable opportunitiesto capture managementpositions

Increased income throughhigher value employment

e.g.• Waqaf assets• Malay reserve land

e.g.• Shared in listed/ non-listed companies

Property Corporate Equity

Education

Employement

Areas where GLCs can support

Principles of Bumiputera Economic TransformationüMarket-friendlyüNeeds-basedüMerit-basedüTransparentüPro-growthüSustainable

competitiveness

pg 45

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7 Moving Forward Towards 2015

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Chapter Highlights

• Theroadaheadisfraughtwithuncertaintyandchallenges.

• In particular, the world economic landscaperemainsprecarious,withnoclear resolutionoftheEuropedebtcrisis.

• Competition is also intensifying withliberalisation within ASEAN, proliferation ofFree Trade Agreements and the CompetitionAct2010beingenforcedsinceJanuary2012.

• Therewillalsobenewregulatorydevelopments(e.g.intheaviationandautomotiveindustries).

• In addition, the Government has intensifiednational transformation with the recentintroduction of various transformationprogrammessuchas theRuralTransformationProgramme,DigitalTransformationProgramme,Rural Transformation Center, UrbanTransformation Center and Talent Roadmap

2020. GLCs’ active involvement in theseinitiatives are critical as the fraternity forms asignificantpartofthecountry’seconomy.

• TherehavealsobeennewexpectationsonGLCstoleadinareasrelatedtonationbuildingsuchas developing human capital, improving thelabour market and developing leaders for thenation;drivinginnovationandcustomerserviceexcellence; supporting BETR and upholdingintegrity.Todate,theGLCTfraternityhasstartedembarkingontheseinitiatives.

• In view of the changing landscape describedabove,GLCsmayneedtostartembracingsomenewthoughtleadershipandbreakthroughideasin order to succeed. These include branding,innovation,process integration, transformationcapabilityandsustainability.

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a. Changing Landscape and Its Impact On GLCs

The business landscape continues to evolve as the global economy shifts towards a new equilibrium after the 2008 crisis. In the midst of the still shallow recovery, the global trends of liberalisation and reforms continue with new domestic as well as multilateral initiatives. The ongoing European debt crisis remains a risk to the business environment. At the same time, growth in the emerging economies remains robust although there are warning signs on supply constraints for some of them.

Some of the new developments that will shape the business environment in 2012 and beyond which GLCs need to be prepared for are:

The Competition Act and The Competition Commission Act

The Competition Act and the Competition Commission Act came into force in January 2012. While certain sectors are already technically regulated, the Competition Act is the first horizontal legislation that regulates behaviour of firms in all industries. The Act applies to all firms and is intended to ensure industries are open to entry and firms behave competitively. The Malaysia Competition Commission (MyCC) is set up to act as the regulator and implementor of the Competition Act.

Free Trade Agreements (FTA)

There is a proliferation of ongoing Free Trade Agreements (FTAs) negotiations involving Malaysia. Many provisions of these FTAs, bilateral or regional, involve more than trade facilitation issues. They involve provisions on labour, industrial standards and dispute. Malaysia has signed bilateral FTAs with Japan, New Zealand, Chile, Australia, India and Pakistan. Malaysia is currently negotiating the Trans-Pacific Partnership Agreement (TPPA) which involves eight other countries including the USA, as well as the ASEAN-EU FTA.

ASEAN 2015

The ASEAN Charter, effective December 2008, serves as a framework and foundation to achieve an integrated ASEAN Community by 2015. One of the initiatives under the Charter aims to establish ASEAN as a single economic market and production base – accelerating regional integration in priority sectors; facilitating movements of business people, skilled labour and talent; and strengthening the institutional mechanisms of ASEAN.

New Regulatory development

National Aviation Council (NAC)

The Prime Minister announced on the 3 May 2012 the establishment of the National Aviation Council to coordinate all policies related to the aviation industry. This will hopefully fill the current void in the industry to better regulate airlines and airports activities.

National Automotive Policy

Ministry of International Trade and Industry (MITI) has completed consultations with industry stakeholders and is finalising the 3rd version of the National Automotive Policy, (NAP3). It remains to be seen the extent to which NAP3 will liberalise the auto sector which remains one of the very few sectors that is still protected.

European Sovereign-debt Crisis

The European debt crisis continues to be a concern with the possibility of Greece exiting the Euro. This may have repercussions extending to Asia which may eventually impact GLCs.

b. New Transformation Programmes

The Government has introduced various programmes under the umbrella of National Transformation Policy: Welfare for the Rakyat, Well-Being for the Nation, to stimulate the economy and proposed inclusive programmes for the people’s well-being. The programmes are:

7 Moving Forward Towards 2015

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Rural Transformation Programme

The Rural Transformation Programme (RTP) is aimed to transform rural areas to attract private investments and generate economic activities which would create better employment for the young generation to return and work in the rural areas. GLCs will continue to contribute in rural development in addressing the gaps between rural and urban areas such as supply of electricity to rural houses, financing loan for micro businesses and bridging the digital divide.

digital Transformation Programme

Digital Transformation Programme (DTP) or known as Digital Malaysia has been launched to initiate the transformation into a digital economy with highlights on innovation, creativity and productivity. The aim is to place Malaysia in the top 20 (now 36 out of 70 countries) by 2020. GLCs especially in telecommunication sector (e.g. TM, Axiata) are contributing significantly to be the enabler of the digital economy. HSBB and 4G technology will serve as catalyst for an enriched and integrated digital lifestyle.

Rural Transformation Centre

Rural Transformation Centre (RTC) was introduced under the National Blue Ocean Strategy 4 (NBOS4) with the objective to bring development to the rural population such as better access to many services. This is to help rural folks to market rural products thereby gradually eradicating rural poverty.

Urban Transformation Centre

Urban Transformation Centre (UTC) is aimed at providing assistance to urbanites in view of the rising cost of living. UTC initiative was established

under the National Blue Ocean Strategic 6 (NBOS6) which will become a one-stop centre to enhance their personal and professional lives. GLCs are expected to support in providing financial assistance for micro and small enterprises, and set up a center for utilities payment.

Talent Roadmap 2020

Talent Roadmap 2020, launched in April 2012, is to ensure that Malaysia has a large pool of professionals to meet the needs of an advancing Malaysia,

especially in the critical areas of the ETP. The roadmap has three Strategic Thrust: Optimise Malaysian Talent, Attract and Facilitate Global Talent and Build Networks of Top Talent. Cross Assignment Programme which was initially under the Orange Book initiatives has been handover to TalentCorp as the Secretariat of the Programme, in partnership with the “Jabatan Perkhidmatan Awam” (JPA). GLCs will continue to participate in this programme and further enhance their involvement in the Bond Transfer Programme for JPA scholars.

c. New Expectation On GLCs

Apart from the new formal programmes, there have also been various explicit and implicit expectations on GLCs to lead in areas of Nation Building such as the development of human capital, the improvement of labour market, the supply of talent, driving innovation agenda instituting customer services excellence and upholding integrity.

development Of Human Capital And Improvement Of Labour Market

As the need to raise the standards of human capital and labour market and also to share the benefits of their achievements with the employees, GLCs have agreed in the recent PCG Meeting 24 in May 2012 on the following:

• GLCs are ready with the implementation of minimumwage and will lead the nation for the implementation as announced by the Government recently and make it effective as of 1st May 2012. The increase in minimum wage will be implemented at RM900 for Peninsular Malaysia and RM800 for East Malaysia across all business sectors (except for domestic maids and gardeners). Apart from taking the lead with the implementation, GLCs will also go beyond by considering what is the ‘moral wage’ to address the rising cost of living in the urban areas.

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• Performance-linkedcompensationintheformofalongterm incentive plan will be put in place for the GLC employees, where share awards should be considered in view that it is a more contemporary and better way of doing a long-term incentive plan.

• GLCswill put in place an upwardmobility scheme tohelp their non-executive employees who have limited options to expand their career opportunities by providing a continuous upskilling and training programmes to move them towards an upward career expansion to rise up within the company. This should also help the upward mobility not only for the employees but also for their children, where for example the children of technicians can become engineers.

• IncreaseinretirementageisenvitablewithGLCsleadingthe implementation for the nation. However, it will be implemented gradually and the retirement age should be extended on the basis of productivity.

• GLC Board compensation needs to be aligned withmarket rates to ensure they attract the best talent.

GLCs As “Leadership Factory For The Nation”

In the recent Leadership Development Circle (LDC #6) under the Orange Book initiative, the theme was – ‘GLCs as Leadership Factory for the Nation’. This is in line with NEM, where the idea is for:

• GLCstoproduceregionalandglobaltalenttocaterforregional and global expansion.

• GLCstohelpbuildentrepreneurshiptalenttogenerateamore vibrant economy through conversion vendor equity programme and entrepreneurship training modules in human capital development programmes.

• GLCs to proliferate top level talent to overcome theshortages by enhancing Cross Assignment Programmes and intensifying the Accelerated Development Programmes.

TalentCorp Malaysia has now been fully setup at the national level to provide a platform to enhance talent availability that could upturn investment as well as increase the national

growth. The aspiration is for Malaysia to become a global talent hub by 2020, where it will be a destination of choice for world-class talent to work, live and play. Hence, with this aspiration, TalentCorp is able to assist and synergise with GLCs to turn them as “Leadership Factory for the Nation”.

Innovation In GLCs

The Government has initiated a national innovation agenda to spur the nation towards becoming a high income and developed nation. In order to elevate the subject further, the Government has asked GLCs to establish an Innovation Index where later this could be extended to other corporate Malaysia at the national level.

In developing this “GLC Innovation Index” (GII) with a scorecard, 12 key dimensions valid across all business models, markets and countries are used to assess GLCs performance and capabilities in innovation areas. The input came from various leadership interviews, online surveys and benchmarking data from various local and international companies. The final innovation results and findings for GLCs are exhibited below as per Exhibit 34.

Exhibit 34: GLC Innovation Index And Scorecard Results

1) Average of each dimension score across all GLCs 2) Highest score across all GLCs for that dimension3) Highest score in the category across all sectors

Note: Only innovation input dimensions are displayed as these are levers that firms can work on in order to determine outcomes (pipeline, execution and returns)

Source: GLC Innovation Survey 2012 (17 GLCs), Boston Consulting Group (BCG) Innovation Survey data for global companies

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From the “GLC Innovation” study conducted recently, the key findings are to increase the sense of urgency in intensifying the innovation agenda within the organisation, to make innovation as internal part of business strategy by aligning the organisation together and to improve the innovation cycle by giving priority for faster execution and commercialisation of best ideas.

Customer Service Excellence In GLCs

In making the country more competitive, the idea of placing Malaysia as one of the leader in customer service excellence was mooted, with “The National Customer Service Index” starting at GLC level, which was endorsed at PCG Meeting 23 in May 2011. So far, there are 14 countries in the world that measure their customer service levels at the national level. In this Asian region, Singapore, Hong Kong and South Korea are measuring their customer service levels at the national level. Please refer to Exhibit 35 below for ‘The Malaysia Hospitality Framework’.

Exhibit 35: Malaysian Hospitality Framework

Source: Maybank

The project to create the GLC Customer Service Index (GCSI), is already in Phase 2 of 5, where after partnering with Malaysia Productivity Cooperation (MPC) as an independent party for collaboration with the Yellow Book Circle, we are now developing the Customer Service charter and framework with the tracking mechanism. This will lead to the setup of Customer Service Index for Malaysia based on international standards. We are now seeking all GLCs

to participate in this project which will be completed by October 2012 with the first Customer Service Index to be reported in the next PCG Meeting 25 in November 2012.

Bumiputera Economic Transformation Roadmap

GLCs will be actively supporting the implementation of BETRintheareasofeducation&capabilitybuilding,vendordevelopment programme, divestment & outsourcing ofnon-core business and procurement activities that can be taken up by high potential and merit based Bumiputera companies.

Moving forward, GLCs are intensifying its vendor development programmes by increasing number of participation and graduation of Bumiputera entrepreneurs. GLCs are currently doing active engagement with TERAJU to establish potential areas for participation by TeraS companies. Finally, Khazanah Nasional Berhad and Permodalan Nasional Berhad will announce and initiate the process of divesting 5 non-core companies each to Bumiputera companies.

Integrity Platform

The Government continues to fight against corruption where integrity has become an important measure in public and private sectors. In supporting this agenda, Corporate Integrity Pledge (CIP) has been developed to address corruption in the private sector in line with Integrity Pacts initiative, which was introduced in 2010, to address procurement issues in several GLCs such as Sime Darby, TM, TNB, Maybank, MAHB and Bank Islam have signed the CIP to support the Government in fighting corruption within their organisation.

GLCs are also supporting Government’s initiative to fight corruption by setting up a Certified Integrity Officer (CeIO) in their organisation. GLCs will collaborate with Malaysia Anti-Corruption Academy (MACA) to develop the programme and train their staff to become a CeIO. The CeIO will then be responsible to plan, implement and monitor the effectiveness of integrity programmes conducted within their organisation.

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d. Adoption Of New Thought Leadership For Step Change In Performance

In order for GLCs to achieve their ambitions towards 2015 and beyond, and in view of the changing landscape described above, the journey ahead will be more challenging. GLCs may need to start embracing new, dynamic and breakthrough ideas to step up performance. Some examples of these are as follows:

Branding

This is a subject that champion aspirants need to master, especially when GLCs are playing in the regional/global arena. Strong brands bring with them unfair competitive advantage in the market place e.g. strong customer loyalty, commanding value position and ability to withstand downturns. The ability to brand unfortunately is a core competency of the branded, and it is more than just advertising, visibility and marketing. For better branding ability, proper knowledge, experience and methods are needed. GLCs should quickly acquire them.

Innovation

Innovation is something any advanced country, society and firm lives and breathes. Innovation will also help create brand renewal, make organisations/products contemporary and give brand longevity. Our Government is encouraging innovation. Although people talk about it, the big question remains – “how”? There are many ways. An action lab is one approach. Many global organisations have used it successfully including General Electric, Shell and British Gas. Closer to home, the Government’s GTP and ETP programmes have benefited immensely from it. As GLCs have already embarked on developing an innovation index, this can be built on to capture further learnings and improvements.

Process Integration

This is another element that is needed to thrive in today’s fast and frequently changing environment. Implementing process integration will enhance a company’s flexibility, adaptability and speed to market. Process integration is about having more market oriented organisation designs to break down silos which affect many companies. Large multinational companies have successfully applied this and emerged as winners in their own right.

Transformation Capability

To achieve big results fast and be able to make quantum leaps, organisations need to have strong transformation capability. Many organisations speak highly of the need for it but struggle in the implementation.

Sustainability

Sustainability is fast gaining prominence. Yet many companies continue to underplay or treat it with secondary importance, unknowingly at their own peril. Leading edge companies are realising that they can enhance their bottom line by giving serious attention to people and the planet, rather than just profits. These companies build enduring, meaningful, sustainable advantage that deeply benefits the larger society and in turn themselves.

All the above need to be anchored on delivering tangible results.

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Appendices

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pg 56

• ProvideProgramme stewardship• Reviewprogress• Helpresolveroad-

blocks

• Invitedtoprovideviewsand engage in dialogue sessions

• OverseeandcoordinateProgramme activities

• Track,monitorandreport progress

Putrajaya Committee on GLC High Performance (PCG)

• Prime Minister, Dato’ Sri Mohd Najib Tun Haji Abdul Razak – Chairman• Minister of Finance II, Dato’ Seri Haji Ahmad Husni Mohamad

Hanadzlah • Minister in the Prime Minister‘s department, Tan Sri Nor Mohamed

Yakcop • Chief Secretary to the Government, Tan Sri Mohd Sidek Haji

Hassan• Secretary General of Treasury, Tan Sri Dr. Wan Abdul Aziz Wan

Abdullah• deputy Secretary General of Treasury, Dato’ Mat Noor Nawi• President and Group Chief Executive, Permodalan Nasional

Berhad, Tan Sri Dato’ Sri Hamad Kama Piah Che Othman• Chief Executive Officer, Lembaga Tabung Angkatan Tentera, Tan

Sri Dato’ Haji Lodin Wok Kamaruddin• Chief Executive Officer, Employees Provident Fund, Tan Sri Azlan

Zainol• Group Managing director and Chief Executive Officer, Lembaga

Tabung Haji, Datuk Ismee Ismail• Managing director, Khazanah Nasional Berhad, Tan Sri Dato’ Azman

Haji Mokhtar

Joint Working Team (JWT)

Secretariat:

Khazanah Nasional Berhad

GLIC Representatives:

Permodalan Nasional Berhad• DatinPadukaKartiniHajiAbdulManaf• MohamadIdrosMosin• NursyahidaAbdullah

Lembaga Tabung Angkatan Tentera• MohdSaubaeRoslan• SairaBanuCharaDin

Employees Provident Fund• MohamadNasirAb.Latif• SharifahMa’arof

Lembaga Tabung Haji• AbdulGafforSahulHamid

G20 Chairmen and CEOs

Appendix A – PCG And JWT Structure

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pg 57

What is EP?

EP is an important yardstick to measure value creation to shareholders. It shows a company’s net income after deducting shareholders’ opportunity cost in investing money in the firm.

There are two approaches to compute EP:

Spread ApproachEP = (ROIC – WACC) * Invested Capital; or

Residual ApproachEP = NOPLAT – (Invested Capital * WACC)

Note:ROIC: Return on Invested CapitalWACC: Weighted Average Cost of Capital NOPLAT: Net Operating Profit less Adjusted Tax

Why EP?

EP supplements accounting profit to provide a more accurate picture of the underlying economic performance of a company because it measures performance in two dimensions:

a) Profit vs. Capital Takes into account the required rate of return for equity and debt capital providers while analysing profits earned by the

company

b) Risk vs. Return Incorporates returns earned by the stakeholders based on the risk of their investments

Independent research has shown that there is a stronger correlation between improvements in EP to shareholder value than there is to accounting profit. Improvement in the long-term trend in EP signals fundamental improvement that ordinarily lends confidence to investors.

Appendix B – Economic Profit definition

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SCORECARdSG20

Explanatory Notes

1. Net profit is defined as net profit after tax and minority interests (“PATAMI”) after exceptional items

2. Operating cashflow is defined as operating cashflow after net interest receipts

3. Net cash/(debt) is defined as year-end total cash and short-term investments, less year-end total borrowings

4. Market capitalisation refers to year-end market capitalisation

5. ROE is defined as PATAMI divided by average shareholder funds for the year

6. debt-to-assets is defined as net debt divided by the sum of net debt and total balance sheet equity, inclusive of minority interest

7. Operating margin is defined as earnings before interest, tax, exceptional items and associate income, divided by revenue

8. Net interest income is defined as bank interest income less interest expense; excludes Islamic finance and fee-based income

9. Loan assets is defined as year-end loan, financing and advances, as per balance sheet

10. Risk-weighted capital ratio (“RWCR”) refers to the statutory definition based on Basel standard prevailing at the time, before dividends; Malaysian operations only

11. Net non-performing loans (“NPL”) refers to the statutory definition i.e. after specific provisions but before general provisions

12. Backward-looking accounting data and derivative financial ratios may differ from prior-year Progress Review reports due to the restating of financial accounts

13. The Headline KPIs mentioned in this Report are targets or aspirations set by the company as a transparent performance management practice. The Headline KPIs shall not be construed as either forecasts, projections or estimates of the company or representations of any future performance, occurrence or matter as the Headline KPIs are merely a set of targets/aspirations of future performance aligned to the company’s strategy

Appendix C

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May-04 May-06 May-08 May-10 May-12

AFFIN

290.0

340.0

240.0

190.0

140.0

90.0

KLCI EX GLC-20

2009

2010

2011

-93.8

-7.1

-44.7

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 372 489 508Net interest income (RM’m) 818 840 870Loan assets (RM’m) 22,497 26,574 30,437Market cap (RM’m) 3,766 4,618 4,603ROE (%) 8 10 9Risk-weighted capital ratio (%) 14 14 13

Headline KPIs

Target

11

Actual

11

Target

12

After-tax ROE (%) 10.0 9.4 9.6After-tax ROA (%) 1.1 1.0 1.0Net Impaired ratio (%) 2.8 2.8 2.7Earnings per share (sen) 35.3 34.0 38.3

Achievements

Financial Performance FY2011• RecordedaprofitbeforetaxofRM709.1minFY2011,anincreaseof11.2%ascompared

to FY2010.• Loansandadvancesgrewby14.4%inFY2011ascomparedtoendDecember2010.• Customerdepositsgrewby18.9%inFY2011ascomparedtoendDecember2010.

Strengthened foothold in the region• ThepresentstrategicpartnershipwithTheBankofEastAsia,Limited(BEA)willenable

AFFIN Banking Group to enhance its competitive positioning by leveraging BEA’s international platform and capitalising on BEA’s branch network in China to facilitate cross border transactions.

Enhanced domestic Presence• AFFIN Bank (ABB) launched its 2nd saving deposit campaign called “OMG-Its back!”

which garnered deposits of RM1.5b and 71,000 new customers in FY2011.• ABB’sratingbyRAMofA1&P1wasreaffirmedinyear2011.• ABBopened6newbranches inmajorgrowthareasandrelocated5branchestonew

growth areas in 2011.• ABBisalsoleveragingonGroupsynergybyopening42ATMsatBHPstationsin2011.• AFFINIslamicBankopenedanewbranchinJitra,Kedahandintroducednewproducts

based on Istisna’, Murabahah, Musharakah Mutanaqisah and Ijarah.• AFFIN Islamic launched ‘Let’s Talk MM’, an innovative home and business premises

financing product based on Mushakarah Mutanaqisah concept which mitigates customers’ risk on new property launches and developments.

• AFFIN InvestmentBank (AIBB)opened two (2) newstockbrokingbranches inTamanMidah, Cheras and Sea Park, Petaling Jaya.

• AFFINFundManagementBerhadlaunchedAFFINQuantumFundwithanAssetSizeofRM200m in July 2011.

Focus• Continuouslyenhancingservicequalitybyleveragingontechnologytoimprovedelivery

platform.• Develop human capital and strengthen ability to attract and retain best talents and

inculcate a performance based work culture.• Identify,anticipateandsatisfycustomerneedsandsustaincustomersatisfactionlevel.• Maximise strategic alliances and collaboration with business partners, shareholders,

correspondent banks and Government Agencies.

Awards ReceivedAIBB received the following awards in 2011 Inaugural Wall Street Journal’s Asia’s Best Analysts Survey:-• ChiefAnalystrankedNo1intheutilitiessectorinAsia.• Rankedjointlyat21st amongst Asia’s Best Brokers category.

Challenges

Market Competition• Net interestmargin (NIM)squeeze.MostanalystprojectingNIMtobehoveringaround

2.2% in 2012 compared to 2.3% last year.• Enhancingfeebasedincomeinordertodiversifyoverallrevenuestream.• Attracting consumer deposits in anticipation of stringent liquidity requirements under

Basel III as well as maintaining healthy Loan to Deposits Ratio.• Stiffcompetitioninmortgagefinancingduetoinnovationinproductfeaturesandpricing

issues.• External environment affecting the ISO 27001 Certification – AIBB become the 1st

Malaysian Investment Bank to obtain certification from globally Recognised TUV Rhineland (Germany’s Technical Inspection Authority).

• UncertaintiesintheDomesticEconomy.• More regulations and laws coming into force making the operating landscape more

challenging.• “National” banks are steadily positioning to become regional championswith superior

scaleandcompetitiveadvantageinproducts&servicesofferingacrossregionalmarketscompared to “smaller” local banks.

• Locally,the“big”banksarealsonowtargetingmidsizedcompaniesasclientsresultinginstiffer competition and fee compression.

• Thewarfortalent,especiallylocally,hasresultedinscarcityofexperiencedhumancapitalin the financial services sector, making the recruitment and retention of talent a real challenge.

• Rampant poaching of remisiers by competitors by offering high commission sharingscheme and upfront cash offers has adversely impacted the sustainability of the agency broking business model in the near-term in the stock broking business.

TSR Index Economic Profit (RM’m)

AFFIN HOLdINGS BERHAd

Source: G20 Reporting, Bloomberg, PCG Analysis

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2009

2010

2011

1,177.5

1,856.2

2,001.2

Apr-08 Apr-09 Apr-10 Apr-11 May-12

AXIATA340.0

290.0

240.0

190.0

140.0

90.0

KLCI EX GLC-20

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 1,653 1,770 2,346Operating cashflow (RM’m) 4,746 6,077 6,021Net cash/(debt) (RM’m) -10,317 -4,406 -4,842Market cap (RM’m) 25,758 40,114 43,516ROE (%) 11 10 12debt-to-assets (%) 35 18 19Operating margin (%) 24 22 24

Headline KPIs

Target

11

Actual

11

Target

12

Revenue Growth (%) 10.0 5.3 5.3EBITdA Growth (%) 10.3 1.0 1.8Return on Invested Capital (ROIC) (%) 12.6 12.2 11.3Return on Capital Employed(“ROCE”) (%)

NA 9.8 8.9

Achievements

Financial highlights for 2011 for Axiata Group:-• Group revenue increased 5.3% YoY to RM16.4b, on the back of higher data in key

markets particularly Celcom, XL and Dialog.• Group EBITDA increased marginally at 1.0% YoY to RM7.1b due to several one-off

charges. Normalised EBITDA growth would have been 3.2% YoY.• GroupPATAMI increased32.5%YoY toRM2.3b.NormalisedgroupPATAMI increased

2.4% YoY.• Group ended the year 2011with strong cash position of RM6.6b and balance sheet

significantly strengthened. Gross debt to EBITDA ratio stands at 1.6x at end FY2011, representing one of the healthiest balance sheets in the industry.

• FreecashflowatFY2011atpositiveRM2.7b.• GroupreceivedFrostandSullivan’sAsiaPacificICTAwardforBestTelecomGroupforthe

3rd consecutive year. The group also won the Telecom Asia Awards for the Best Regional Mobile Group for the second year running. The Group was the only Malaysian company to be listed in Forbes Fab 50 list out of 1,000 traded companies in Asia.

• Group’stotalsubscriberbaseexpandedtocloseto200million,up25%fromayearago,averaging 3.3m per month, making the Group one of the largest telcos in the region.

• Announcedaccumulativeincreasepayoutindividendsof19senpersharein2011(singletier including interim dividend of 4 sen per share paid last year), a 60% payout which is double the 32% from last year. Final dividend payout has been approved by shareholders at the AGM held on 23rd May, 2012.

Challenges

• Foreign exchange fluctuation across the operating countries and strengthening ofRMagainst most currencies Axiata operates in.

• Regulatory/PoliticalChanges:• Adversechangesinregulation–EspeciallyIndiaandBangladesh• Adverse regulation – License renewal inBangladesh; spectrum rearrangement in

Indonesia and swaps in Cambodia; license cancellations in India.• UpcomingelectionsinMalaysia(2012)

• Marketenvironmentchallenges:• Changesinrevenuemixbetweenvoiceanddatasubstitution.Dataservicescurrently

provide lower margins as the service is still building scale and volume.• Significantincreaseindomesticcompetition–Customerretention&loyalty,product

bundling and changes in consumer behaviour.• IntensecompetitioninmarketslikeCambodiaandIndia.• Changingconsumerbehaviourandchoiceofplatforms–e.g.Over-the-top (OTT)

players such as Facebook, Skype, Google.• Funding/liquiditymanagement–Potentialrisingcostsofborrowing.

TSR Index Economic Profit (RM’m)

AXIATA GROUP BERHAd

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 62: transformation programme

pg 61

BIMB HOLDINGS BERHAD

2009

2010

2011

71.0

189.9

187.9

Historical Performance

FYE December 31 2009* 2010** 2011

Net profit (RM’m) 114 231 203Net financing income (RM’m) 591 773 752Loan assets (RM’m) 9,662 11,861 14,141Market cap (RM’m) 1,280 1,504 2,166ROE (%) 10 14 17Risk-weighted capital ratio (%) 14 17 16

* FYE June 30 (prior to change in FYE to December 31)** 18 months ended December 2010

Headline KPIs

Target

11

Actual

11

Target

12

Revenue Growth (%) 21.60 17.60 –Return on Equity (%) 14.80 17.31 16.00Return on Assets (%) – 1.53 1.50

Note: For FY2012, BHB had announced ROE and ROA as Headline KPIs targets

Achievements

Despite a challenging and uncertain external environment, BIMB Holdings Berhad (“BHB”) Group was able to seize several growth opportunities to achieve strong performance• TheBHBGrouprecordedarevenueofmorethanRM2.0bforfinancialyear(“FY”)2011,

representing a growth of 17.6% (FY2010-annualised: RM1.7b), and profit after zakatandtaxofRM567.6m(FY2010-annualised:RM392.1m)atanannualisedgrowthrateof44.8%.

• BHBunveiled its dividendpay-out policy of at least 50%of theCompany’s net profitattributabletoitsordinaryshareholders,on25Nov2011.

• BankIslam,51%subsidiaryofBHB,continuedtoregistercredibleresultswithROEat17.7%andROAof1.5%.Gross Impaired/NPFratiowasreducedto2.6%forFY2011(FY2010:4.5%),whilsttotalassetsexpandedby5.93%toRM32.2b.

• TakafulMalaysia,BHB’s65%-owned listed subsidiary, generatedRM1.4b in operatingrevenueandPBZTofRM101.4mrepresentingagrowthof17%and55%respectively,whilsttotalassetsincreasedbyapproximately11.0%toRM5.9b.

Bank Islam lived up to tagline of ‘Pioneering Change’• Joint Principal Adviser, Joint Lead Arranger, Joint Lead Manager and Joint Shariah

Adviser for RM5b IslamicSecurities Programme,whichwas awardedProject FinanceInternational’sAsiaPacificBondDealofYear2011andIslamicFinanceNews’IjarahDealofYear2011.

• Becamea20%shareholderinAmanaBankLimited,SriLanka’sfirstIslamiccommercialbank.

• Becoming the first Islamicbankandcommercialbank tobeengagedas thePrincipalAdviser,ManagingUnderwriter,UnderwriterandPlacementAgentforanIPOandlistingexercise.

• Receivedthe‘AnugerahInovasiIslamPeringkatKebangsaan2011bagiInovasiKewanganIslam’awardbyMinistryofScience,Technology&InnovationforintroducingTAPMobileBanking-iservice.

• Opening9newbranchesin2011,bringingitstotalto122.

Takaful Malaysia achieved another year of strong growth despite challenges• Launched Takaful mySME solutions, designed to provide SME entrepreneurs with

comprehensiveprotection.• Launched its Retail and Corporate Agency as well as Bancatakaful web portals that

empoweritsalesforcetobetterservecustomers.• Embarked on the implementation of electronic Document Management Solution and

WorkflowManagementSystemtofacilitateapaperlessworkingenvironment.• Improveditsservicedeliverybyfullyrefurbishing14TakafulmyCareCentres,whichare

morecomfortableforusers.• ReceivedtheBrandLaureateAward2010-2011intheCorporateBrandingCategoryfor

BestBrandsinFinancialServices-InsuranceTakaful.

Challenges

External challenges• Continued uncertainty in global economic environment, particularly in Eurozone, and

volatilityinglobalfinancialmarkets.• Continuedliberalisationofdomesticmarket;intensifiedcompetitionparticularlyinTakaful

sectorwith4newFamilyTakafullicensesissued.• Increasingstandards for regulatorycapital requirementunder the forthcomingBasel III

wherebybankinginstitutionsarerequiredtomaintainahigherTier1capital,includingacapitalconservationbufferandacountercyclicalbuffer.

Internal challenges• Expandbusinesswhilstexercisingprudencetoensuregoodassetqualityandsustainable

growthonthebackofastrongfinancialperformancein2011,as2012isexpectedtobeanotherchallengingyear.

• Group-levelcost-incomeratioisathigherlevelascomparedtotheindustryaverage.• Relativelysmalldomesticmarkettoself-sustainlong-termgrowth.• Competition for talentwiththerightskill-set,particularlywithentryofhighlycapitalised

multinationalplayers.

TSR Index Economic Profit (RM’m)

May-04 May-06 May-08 May-10 May-12

BIMBKLCI ex GLC-20

0.0

150.0

50.0

100.0

200.0

250.0

300.0

Source:G20Reporting,Bloomberg,PCGAnalysis

Page 63: transformation programme

pg 62

BOUSTEAd GROUP BERHAd

2009

2010

2011

70.1

114.3

159.5

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 342 538 611Operating cashflow (RM’m) 424 48 706Net cash/(debt) (RM’m) -2,548 -2,739 -3,955Market cap (RM’m) 3,154 5,058 5,434ROE (%) 10 13 14debt-to-assets (%) 37 37 43Operating margin (%) 8 9 7

Headline KPIs

Target

11

Actual

11

Target

12

ROE (%) 12.0 14.1 10.0ROA (%) 9.0 9.4 7.5Net dividend per share (sen) 30.0 39.0 30.0

Achievements

Financial Performance for FY2011• BousteadHoldingsBerhadhaspostedarevenueofRM8.5binFY2011,anincreaseof

39.3% as compared to RM6.1b in FY2010.• RecordedanetprofitofRM731.9m,anincreaseof17.1%ascomparedtoRM624.9min

FY2010.• ThecompanyhasalsosurpassedallitstargetKeyPerformanceIndicator(KPI).

Continued Focus on Enhancing Shareholder Value• BousteadNavalShipyardSdnBhdhasbeenawardedacontractfortheconstructionof

six Second Generation Patrol Vessels with Littoral Combat Capabilities (SGPV-LCS) for the Royal Malaysian Navy.

• RoyaleBintangHotelsandResortsisexpandingitsoperationwiththeexpectedopeningof new hotels in Damansara, Cherating and Penang.

• The opening of the new Curve NX Building, Kidzania and Surian Tower in MutiaraDamansara.

• On-goingandnewlaunchesofhousingprojectsinMutiaraDamansara,MutiaraHills inSelangor and Taman Mutiara Rini in Johor.

• MHSAviationBerhadexpandingitfleetsofhelicoptersthroughthepurchaseof5brandnew EC225 heavy helicopters from Eurocopter Malaysia Sdn Bhd.

Innovation and R&d• AppliedAgriculturalResourcesSdnBhdhasmanagedtoexpandtheseedproduction

capacity of AA Hybrids to 8 million seeds and AA Vitroa (tissue culture) planting materials to 0.6 million ramets.

• Pharmaniaga Berhad has managed to commercialise its products such as Plecaz,Ansuzole, HP 129, Citrex Supertots range and Baraka.

• Collaboration between theGovernment and TheUniversity of NottinghamMalaysia insetting up “Crops for the Future Research Centre” to seek out crops that have potential to be grown for human sustenance or for commercial market.

• JointventurebetweenTheUniversityofNottinghamMalaysiaandSAHZHoldingsSdnBhd in “NANO Super-capacitor Pilot Plant” with the objective to produce nano technology super-capacitor that could store more energy than the usual capacitor.

Awards & Accolades• PharmaniagaBerhadwasawarded:- “Top 100 Leading Graduate Employers 2011” by gradmalaysia.com.

Achievements

Awards & Accolades (continued)• MHSAviationBerhadwasawarded:- “1 million flight hours on fleet equipped by Turbomeca Engines” by Turbomeca Asia

Pacific.• BousteadEstateAgencySdnBhdwasawarded:- RSPO Accreditation for sustainable palm oil production under Sungai Jerneh Business

Unit.

Corporate Social Responsibility• AcollaborationwithRTMandBHPetrol for theTVprogrammecalled “DiCelah-Celah

Kehidupan” that showcases real life stories of the rakyat facing challenges such as poverty, disability and old age.

• ContinuouscontributiontoYayasanWarisanPerajurit.• Provide training under “Skim Latihan 1Malaysia” to enhance the unemployed fresh

graduate.• TheBHPetrolOrangeRun.

Challenges

Managing Impact of Internal & External Factors• Fluctuationincrudepalmoilpricesthataffecttheplantationbusiness,whichisamajor

contributor to profitability.• Decline in international trade with an excess in the number of ships has resulted in

downward pressure in the maritime sector.• Competitionofimportedproductsfromtheneighbouringcountriesandsluggishdemand

in the domestic market for the fiber cements products caused the downward pressure on selling prices.

• Lackofcompetentandexperiencedtalentsinspecificindustry.

Strengthening Market Position• Continuouslookoutforprimelandbankthatcanbevalue-added,beitpropertyorretail

development.• Mechanisationofestateoperationthatwillreducedependencyonlabourandenhance

productivity.• Strategicnetworkexpansionforpetrolstationandfocusonmarginoptimisationandcost

control.• Improvingondeposits,loans,feebasedincome,managingthenon-performingloanand

growing the retail and investment banking business.

TSR Index Economic Profit (RM’m)

May-04 May-06 May-08 May-10 May-12

BOUSTEADKLCI ex GLC-20

0.0

400.0

200.0

600.0

800.0

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 64: transformation programme

pg 63

CHEMICAL COMPANY OF MALAYSIA BERHAd

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) -6 15 22Operating cashflow (RM’m) 301 137 75Net cash/(debt) (RM’m) -701 -605 -607Market cap (RM’m) 919 733 619ROE (%) -1 2 3debt-to-assets (%) 46 41 41Operating margin (%) 3 5 6

Headline KPIs

Actual

11

Target

12

ROE (%) based on PAT 4.5 4.2Operating profit (RM’m) 45.6 62.0

Note: CCM underwent a strategy review of its business in FY2011 and hence did not announce Target Headline KPIs for FY2011.

TSR Index Economic Profit (RM’m)

Achievements

Promising leadership positioning of Pharmaceuticals division• Registereda4.6%growthinRevenuein2011despiteverylimitedcontrolleddrugsquota

from the Drug Control Authority (DCA), Ministry of Health, Malaysia (MoH), non-drawdown of Oseltamavir (Tamiflu) tender by MoH and challeges in the export market e.g. Indonesia’s local import restriction regulation.

• DevelopedapartnershipwithareputableEuropeanMNConHalalalternativeOncology(cancer treatment).

• Engaging in a positive collaboration with a reputable foreign Biotechnology team ofscientiststodevelopthefirstlocallymanufactured(fill&finished)Halalcertifiedbiosimilarproduct.

• SecuredthefactoryGMP(GoodManufacturingPractice)approvalfromKingdomofSaudiArabia (KSA) Food & Drugs Administration (FDA) for the Division’s Bangi plant whichqualifies the products manufactured at that site to be exported into Saudi Arabia which is the gateway to the Gulf Continent.

Strong Consolidation of Chemicals division despite slowing global economy• Deliveredastellarperformancewith recordPBT increaseof56%over2011despitea

lower turnover.• Thisstrengtheningoffinancialposition istheresultofnumeroussuccessfuloperational

excellence&assetoptimisationprogrammes.• Our drive for innovation and investment in R&D for the High Performance Polymers

Business Unit continues to produce superior products and services breaking into new domestic&exportmarkets.

• ThereviewofourTradingStrategy isbeginning toyieldpositive results.Byexiting lowperformancebusinesses,theDivisionisabletoconcentrateeffortsatHighGrowth&HighMargin Sectors like Water, Rubber, Food and Green Chemistry.

Continuous customer focus & improvement Initiatives by Fertilisers division• Conducted clinics on Good Agricultural Practices and Best Nutrient Management to

increase the yield of the oil palm smallholders and private estates.• Formulatedanewfertiliserformulation,MPOBF2SuperKcompound,toincreaseoilpalm

yield on peat land and depleted mineral soil in collaboration with MPOB.• SuppliedfertiliserrequirementsforSmallholder’sReplantingSchemethroughMPOB.• Providedtrainingtopaddyfarmersonbestnutrientmanagementtoincreasetheyieldto

one ton per ha through forums in Selangor, Penang and Kedah. • ConductedpaddydemoplotinIADAPenangtodemonstrateyieldcouldbeincreasedup

to 100% from current level. (from 2.5 ton/ha to 5.4 ton ha).

Achievements

Awards & Accolades• Won2 Platinum & 5 Gold Awards at the 2011 Chemical Industry Council of Malaysia

(CICM) Responsible Care annual event.• Achieved ISO 14000 certification for the Chlor-Alkali and Coagulant plants in Pasir

Gudang.• Received the Halal Recognition Award 2011 from the Halal Industry Development

Corporation (HDC).

Continuous Support for GLCT Programme• Sponsored6schoolsunderthePINTARprogrammefocusingonimprovingthelevelof

EnglishproficiencyforYear2&3students.• Trained60unemployedgraduatesviatheGEMS/SL1Mprogramme.

Challenges

• NondrawdownofOmiflucontractof theRM11mannual tenderbyMinistryofHealth,Malaysia (MoH).

• MoHmorestringentrequirementforBioequivalent(BE)studiescausethecostofthestudyto increase from the pre 2011 RM150K average per study to more than RM500K average per study.

• MoHmorestringentrequirementinproduct/processvalidationdatainproductregistrationprocess puts local manufactured at a disadvantaged position in the quest to be the First to Market generics in Malaysia.

• MoH regulation in not allowing the use of Halal logo on the labels of pharmaceuticalproducts affect the momentum in promoting Halal Pharmaceuticals as the differentiator Malaysia can capitalise on for export growth under NKEA Healthcare. [Under the ETP’s SRI, Malaysia has developed the world’s 1st Halal Pharmaceuticals Standard, i.e. MS2424].

• Regulatory & Legislative barriers affecting expansion of international business, e.g.Indonesian requirement for local manufactured products, Thailand requires local BE, etc.

• AdditionalvolumesofChlor-Alkaliproductsproducedbyourcompetitor&planned forLynas may find their way into the general market should the latter start-up continue to be delayed, creating an imbalance supply/demand position and negatively affecting selling prices.

• Continued Euro Zone crisis is affecting some key industry – Solar manufacturers, egBosch has announced delay in their Malaysian plant start-up.

• PricesforrawmaterialsconsumedbyFertilisersDivision,whicharemainlyimported,areexpected to increase in 2012.

• Demandforcompoundfertilizersmayweakenduetosofteningcrudepalmoilpricesinthe second half of 2012.

2009

2010

2011

-49.6

-12.7

-19.4

May-04 May-06 May-08 May-10 May-12

CCMKLCI ex GLC-20

0.0

150.0

100.0

50.0

200.0

250.0

300.0

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 65: transformation programme

pg 64

CIMB GROUP HOLdINGS BERHAd

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 2,807 3,501 4,031Net financing income (RM’m) 6,069 6,537 6,676Loan assets (RM’m) 142,192 159,181 183,839Market cap (RM’m) 45,348 63,179 55,300ROE (%) 15 16 16Risk-weighted capital ratio (%) 15 15 18

Headline KPIs

Target

11

Actual

11

Target

12

After-tax ROE (%) 17 16.4 16.4Group loans growth (%) 18 14 16TSR > FBM KLCI 14.6%

< FBM KLCI> FBM KLCI

Achievements

2011 Financial Performance• ArecordnetprofitofRM4,031mforFY11.• FY11ROEwasalsoarecordhigh16.4%,butbelowtheGroup’sfull-yeartargetof17%.• DeclaredtotaldividendsofRM1,635m,or22.0senpershare,translatingtoadividend

payout ratio of 40.6% of FY11 profits.

Regional value proposition• Proposedacquisitionof60%ofBankofCommerce(BoC)inthePhilippinesstrengthens

the Group’s overall regional value proposition of facilitating intra-ASEAN investments and trade as well as travel.

Advanced regional investment banking positioning• AcquisitionofmostoftheAsiaPacificcashequitiesandassociatedinvestmentbanking

businesses of the Royal Bank of Scotland (RBS) decisively transforms CIMB into the largest Asia Pacific based investment bank.

• Upon regulatoryapprovals, theGroupwillhavenewon-shorepresence inTaiwanandAustralia as well substantially enlarged operations in Hong Kong, India and China.

Transformation of foreign operations• CIMBNiaga–Continuedhighgrowthrates.• CIMBThai–Launchedcorebankingsystem(1Platform)on19March2012.• CIMBCambodia–Opened7branches.

Other Key Financial Highlights• FY11netprofitatRM4,031m,up15.1%Y-o-Y.• Totalgrossloansincreasedby14.3%Y-o-Y.• Totaldepositsincreasedby11.1%Y-o-Y.• MalaysianconsumerbankPBT increasedby86.1%Y-o-Y toRM1,327mas the7.6%

revenue uplift was complemented by substantially lower credit charges and lower overhead costs.

• Corporate & Investment Banking was 33.1% Y-o-Y lower at RM751mmainly due tothe slower capital market environment given the global economic crisis as well as large transactions in 2010.

• Totalnon-MalaysianPBTdeclinedto38%ofthetotalGroup’sPBTinFY11from48%inFY10 due to absence of the ex-Lippo Bank bond gains at CIMB Niaga.

Challenges

• TightenedBNMlendingregulationsonconsumerwhichinclude:• Stricterloan-to-value(LTV)ratiosonthepurchaseofasecondresidentialproperty.• Afurtherincreaseincapitalchargeinthecomputationofriskweightedassets.• Maximumportfolioconcentrationlimitsforcertainclassesoflendingsuchasunsecured

personal lending and credit card advances.• UncertaintyoverforeignshareholdinglimitforbanksinIndonesia.

Operations• Slowercreditgrowthenvironment.• UncertainglobaloperatingenvironmentresultingfromEurodebtcrisis.• Slowercapitalmarketsingeneralandfewer“mega”transactions.• Internalre-organisationwasinitiatedtostreamlinemanagementstructuresofwholesale

and consumer banking divisions.• MargincompressioninIndonesiaandMalaysia.• Constraintsimposedbygreatercostdiscipline.

TSR Index Economic Profit (RM’m)

2009

2010

2011

806.3

1,227.5

1,507.3

May-04 May-06 May-08 May-10 May-12

CIMBKLCI ex GLC-20

0.0

200.0

100.0

300.0

400.0

500.0

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 66: transformation programme

pg 65

MALAYSIA AIRPORTS HOLdINGS BERHAd

TSR Index Economic Profit (RM’m)

Achievements

Promising leadership positioning of Pharmaceuticals division• MAHBcontinuestobeamongstthebestairportsintermsofpaxmovement.• TotalpassengervolumeforFY2011was64.0million,atotalpaxgrowthof10.7%with

both international & domestic registered double digit growth (International +10.3%,Domestic +11.1%).

• TotalaircraftmovementsinFY2011was632,136(+9.3%fromFY2010).

Financial Highlights• Achievedrecordturnoverfortheninthconsecutiveyearandhavebeenabletoconsistently

deliver commendable operating results.• MAHB continues to surpass its Headline KPIs for 2011 Malaysia Airports recorded

revenues of RM2,754.8m in FY2011, representing a growth of 11.6% compared to the RM2,468.0m recorded in FY2010.

• Aero-revenuecontinuestobenefitfromincreasedpassengerandaircraftmovements.• FY2011sawincreaseinnon-aeronauticalrevenuecontributedbygrowthinretailbusiness

and higher rental revenue.• Sales per passenger for KLIA (inc. LCCT) increased 3.7% in FY2011with KLIA (exc.

LCCT) registering higher sales per pax growth of 4.6%.• MAHB’sownretailarm,Eraman’sbusinessgrewduetohigherretailandF&Bincomeas

a result of increase in passenger volume and higher retail spending per passenger.• MAHBsharepriceconsistentlyoutperformthebenchmarkFBMKLCI.• MAHBhasbeenratedAAA/A3byRAM/Moody’s–GoM’ssovereignrating.

Awards & AccoladesMAHB was awarded the following awards in FY2011:• Forthesecondconsecutiveyear,KLIAimmigrationservicewontheSkytrax2011World

Airport Awards of World’s Best Airport Immigration Service.• Malaysian Corporate Governance Index A+ Distinction award from the Minority

Shareholder Watchdog Group (MSWG).• Highly Commended Corporate Sukuk for Malaysia Airports Capital’s RM1b Islamic

medium-term notes by The Asset Triple A Awards 2011 for Islamic Finance.• Innovative Leadership inGlobalisation byMalaysian Institute of Directors, for strategic

market development that has contributed to building global respect for Malaysian quality, recognising the company’s pioneering endeavours has enhanced Malaysia’s branding in the global marketplace.

• TheHallofFameAwardsundertheSpecialOrganisationAchievementcategory, intheMalaysia Achievement Awards. The award recognises the Company as an organisation that has demonstrated outstanding achievements, with impeccable vision and a passion for excellence.

• GreenLeadershipAwardoftheAsiaResponsibleEntrepreneurshipAwards2011SouthEast Asia.

• KLIAreceived4thplace inSmartTravelAsia.com2011Best inTravelPolloftheTop10Airports worldwide.

• PanPacificKualaLumpurInternationalAirportwonthe2011Asia’sLeadingAirportHotelin the World Travel Awards.

• PanPacificKualaLumpurInternationalAirportreceivedthe2011GlobalLuxuryAirportHotel in the World Luxury Hotel Awards.

• PanPacific Kuala Lumpur International Airportwon theBrandLaureate Awards 2010-2011 in the Best Brands in Airport Hotel category.

Challenges

• Verychallengingeconomicandgeo-politicallandscapeandthemyriadofdauntingtrialsfaced by the industry included the continued slowdown of the United States economy, the Eurozone economic crisis, the political turmoil and uncertainties in North Africa and Middle East and the natural disasters in North Asia and Oceania.

• Anupsurgeintheworld’soilpriceisexpected,inmuchthesamewayasitwasin2011.Apart from a possible increase in fuel price to levels above USD100 per barrel, economic uncertainties in Europe and USA continue to be of concern.

• ThevolatilesituationinsomeMiddleEastandAfricancountriesandthenuclearstand-offwith Iran could pose a threat to the oil price and, as a result, the aviation sector.

• Despite the slowingeconomiesand lower economicgrowth, airportsoperatedby theMAHB Group have done well in the past three years in terms of passenger growth. This is expected to continue though at a reduced level.

• We expect low cost travelwould continue to grow as legacy carriers streamline theiroperations. The International Civil Aviation Organisation has forecasted 6.2% in global passenger growth and 8.8% for Asia Pacific region for 2012, mainly driven by China and India. On the other hand, International Air Transport Association has estimated the global passenger growth to be lower at 4.6%.

• Based on the expected GDP growth of 5% to 6% and assuming world economicenvironment would remain reasonably stable, it is expected that MAHB 2012 passenger traffic across all airports would grow by 6.6%.

• Klia2constructionwillcontinuetobeapriorityandwiththeprojectedpassengergrowth,MAHB expects a challenging but profitable year ahead.

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 378 294 401Operating cashflow (RM’m) 198 300 504Net cash/(debt) (RM’m) -240 -896 -1,655Market cap (RM’m) 4,367 6,908 6,380ROE (%) 12 9 12debt-to-assets (%) 7 21 32Operating margin (%) 30 30 24

Headline KPIs

Target

11

Actual

11

Target

12

EBITdA (%) 773.4 826.5 822.0ROE (%) 10.73 11.70 10.42Airport Service Quality Award (%) Top 5

WorldwideRanked no. 4*/Ranked no. 19**

Top 5*

* 25-40 million pax category** Worldwide Category

2009

2010

2011

90.2

157.8*

152.6

May-04 May-06 May-08 May-10 May-12

MAHBKLCI ex GLC-20

0.0

200.0

400.0

600.0

800.0

Source: G20 Reporting, Bloomberg, PCG Analysis

* restated

Page 67: transformation programme

pg 66

MALAYSIA AIRLINES SYSTEM BERHAd

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 520 234 -2,524Operating cashflow (RM’m) -1,560 104 -567Net cash/(debt) (RM’m) 633 -1,484 -4,554Market cap (RM’m) 4,545 6,985 4,345ROE (%) 21 11 -111debt-to-assets (%) NA 30 81Operating margin (%) -5 1 -17

Headline KPIs

Target

11

Actual

11

Target

12

Operating Proit/Loss (RM’m) 300-600 -2,296 *

* MAS is currently undergoing a review of its business plans in view of recent corporate developments and will announce revised targets once finalised.

Achievements

• OperatingStatistics:• Passengerrevenuegrew2%fromRM9.0btoRM9.8b• CapacityASKgrew7%• RASKincreased2%;yieldincreased4%

• Initiatedrationalisationofunprofitableroutesinviewofsustainedhigheroperatingcosts–Kota Kinabalu international hub routes, Middle East, Africa and South America.

• Invitedtojoinoneworldalliance;expectedtoenterasfullmemberinQ42012.• EightnewBoeing737-800andfivenewAirbus330-300received&enteredintoservice

as part of the fleet refresh programme.

Awards won in 2011:• BestServiceBrand(MASChinaRegion)–Top Travel Award Ceremony.• BestAirlineStation(HongKongStation)–Board of Sabah Tourism.• BestCoverinSpecialInterest/Niche–EnglishCategory(GoingPlacesinflightmagazine

August 2011 Cover – Gold) – MPA (Magazine Publishers Association) Awards 2011.• BestCoverinSpecialInterest/Niche–EnglishCategory(GoingPlacesinflightmagazine

March 2011 Cover – Bronze) – MPA (Magazine Publishers Association) Awards 2011.• ITInnovationoftheYear2011(JointwinnerswithSITA)–TheCAPA–Aviation Awards for

Excellence 2011.• World’sLeadingAirlinetoAsia–World Travel Awards 2011.• Asia’sLeadingAirline–World Travel Awards (Asia & Australasia) 2011.• Asia’sLeadingAirlineLounge–World Travel Awards (Asia & Australasia) 2011.• GlobalLeadershipAwards2011(Firefly)–The Leaders International (An Elite Corporate

Magazine).• Asia’s Best Employer Brand Award 2011 – Employer Branding Institute, World HRD

Congress & Stars of the Industry Group.• TopAirlineAffiliatedMaintenanceandRepairOrganisation(MRO)InTheWorld(MAE)–

Aviation Week’s Overhaul & Maintenance magazine.• AwardofExcellence(GoingPlaces–MagazineCategory)–KL Mayor Tourism Awards

2011.• Top10AirframeMROInTheWorld (MAE–3rd Position) – Aviation Week’s Overhaul &

Maintenance magazine.• InnovativeLeadershipinGlobalisation–Malaysian Institute of Directors (MID).• Regional Travel Magazine of The Year (Going Places – 3rd Position) – Advertising &

Marketing Magazine.

Challenges

• Sustainedhighfuelcostsexpectedtocontinuetoputpressureonoperatingcosts.• Uncertaineconomicoutlookinkeymarketsglobally–Europe,China,MiddleEast.• Increasedcompetitionandovercapacityinkeymarkets.• Ageingfleet&need foracceleratedaircraftexit– tobeable toprovidebetterproduct

offering to customers.• Significantprovisioningassociatedwithaircraftre-deliveries&stockobsolescence.• Need to improveproductivity&efficiencyof theairline in linewithbest-in-classpeers.

Changes in work practices and culture required.

TSR Index Economic Profit (RM’m )

2009

2010

2011

-795

-126

-2,589.6

May-04 May-06 May-08 May-10 May-12

MASKLCI ex GLC-20

0.0

100.0

200.0

300.0

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 68: transformation programme

pg 67

MALAYAN BANKING BERHAd

Historical Performance

FYE 30 June

2009 2010 2011

dec

2012*

Net profit (RM’m) 692 3,818 4,450 2,583Net interest income (RM’m) 5,920 6,771 7,186 4,026Loan assets (RM’m) 185,783 205,555 253,976 274,431Market cap (RM’m) 48,555 53,510 66,853 65,543ROE (%) 7.0 13.6 15.2 16.2Risk-weighted capital ratio (%) 14.8 14.5 15.2 16.3

TSR Index Economic Profit (RM’m)

Achievements

Financial performance continued to improve• Strong revenue growth and continued profit growth for 6-month Financial Period (FP)

2011.• Revenuegrew21.6%YoYontheback16.2%growth in fundbased incomeand

32% growth in fee income.• 6-monthFP2011PATAMIgrew20.0%YoYtoRM2.58b;2QFP2011PATAMIgrew

15.2% YoY to RM1.30b.• Allbusinesspillarsrecordeddoubledigitrevenuegrowth.• PBTrosebyRM597m(+20.1%)YoY.• OnannualisedbasisGrouploansgrew16.2%(23.7%YoY),drivenbystrongloans

growth of 23.7% in Singapore (34.0% YoY) and 31.2% in BII (25.0% YoY) while domestic loans grew 10.0% (17.4% YoY).

• AllowancesforlossesonloansforFP11declined13.9%YoYprimarilyduetohigherrecovery and lower individual allowance. Net Impaired Loan ratio improved to 1.86% in December 2011 from 2.25% in December 2010.

• Groupshareholders’fundsofRM33.4b,totalassetsofRM451.3bandCapitalAdequacyRatio of 16.26% (based on a 85% DRP reinvestment rate).

• ROEof16.2%exceededtargetof16.0%,&LoansandDebtSecuritiesgrowthof16.3%against 12% target.

• Continuedhighdividendpayoutof79.9%.

Key Corporate developments• ChangeofFinancialYearEndfrom30Juneto31December.• BrandingInitiatives

• PrimeMinisterlaunchedrefreshedMaybankGroupcorporateidentity.• NewcorporateidentityforKimEng(MaybankKimEng).• BIIrebrandinginprogress.

• NewAppointments• Dato’KhairussalehappointedasPresidentDirector/CEOofBII.• MichaelFoongappointedChiefStrategy&TransformationOfficer,MaybankGroup• NetworkExpansionDuring the financial periodMaybankaddednewbranches in

Malaysia (+6, bringing total to 392) and Indonesia (+7 to 346). Network expansion also took place the Philippines (+5 to 50) and Cambodia (+1 to 11) during the year.

The Transformation Journey Continues• InFP2011,therestructuringofouroperationsintothethreepillarsofHouseofMaybank

started to make game-changing difference to the customer experience. Under Community Financial Services (CFS), Business Banking and SME segments underwent significant changes where customer models were refined to enhance quality and product/service relevance, resulting in strengthened customer relationships, improved sales and enhanced risk management capabilities. Hip and cool concept branches have been launched.

• EnhancedcashmanagementcapabilitiesenabledGlobalWholesaleBanking (GWB) tocapture additional wholesale deposits whilst GWB retained its leadership of Malaysia’s corporate banking sector. The integration of Maybank Kim Eng progressed on track, boosted its brokerage business by leveraging on regional distribution.

• Our InsuranceandTakaful arm,Etiqa, rolledout its roadmap toachieve thestatusasnational champion by 2015, covering 4 focus areas namely strengthening leadership, regional footprint and humanising customer experience. Etiqa continued to strengthen its core systems to enable seamless information retrieval, automated processes, improved productivity and turnaround time.

Achievements

• IT Transformation saw the implementation of 3major systems namely Islamic ForeignCurrency Loan system, Customer Relationship Management system for GWB and Master Foreign Currency Account system to reduce fund transfer costs and currency conversion losses.

• Maybank’s service quality transformation efforts concentrated on customer serviceworkshops for business pillars and support units, enhancement of branch personnel’s product knowledge, and improving the customer waiting times in branches.

Major Awards for 2011• TheAssetsTrippleAAwards–BestMalaysian IslamicRetailBank,Best IslamicTrade

Finance Bank in Malaysia.• CentralSingaporeCorporateAppreciationAward–ExcellenceAward.• TheSingaporeCompactCSRAwards–BestWorkplaceAward.• NationalAnnualCorporateReportAwards2011–BestCorporateSocial,Responsibility

Awards (GOLD), Overall Excellence Awards (SILVER).• IFRAsiaAwards–MalaysiaBondHouse,MalaysiaEquityHouse(MaybankInvestment

Bank), Asia Islamic Deals – Wakala Sukuk Berhad/Government of Malaysia USD2b sukuk.

• FinanceAsiaCountryAwards–BestTradeFinanceBank.• RAMRatingsAward(MaybankInvestmentBank).• MalaysianTakafulAssociation–BestGroupBusinessOperator(EtiqaTakafulBerhad).• TheAsianBankerInternationalExcellenceinRetailFinancialServicesAwards–BestRetail

Bank in Malaysia, Best Deposit and Liability Business.• The Asian Banker Achievement Awards – Technology Implementation Awards – Best

Retail Payments Implemetation.• EuromoneyAwards–BestPrivateBankingServicesOverallinMalaysia.• BrandLaureateMastersAwards–BestbrandsinBanking.• KLIFF Islamic Finance Awards – Most outstanding Retail Islamic Bank Award, Most

Outstanding Takaful Company.• MPCProductivityAward–ServicesCategory.

Challenges

Global challenges and impact to the financial services industry• DespiteslowereconomicgrowthexpectedinEurozone,USandChina,Maybankexpects

reasonable growth fuelled by the ETP in Malaysia, with relatively low OPR at 3%, strong domestic demand in under-penetrated sector in Indonesia moderated by slower growth in the export-oriented economy in Singapore.

• WithNIMcompressioninthescenario,Maybankadoptsstrategyofresponsiblegrowth,equal focus on managing asset quality and liquidity through sound risk management practices to address potential higher credit costs.

Value creation from Overseas operations• Regionally,wewillcontinuetospreadourfranchise,leveragingonthestrongfoundation

we have established in our three home markets of Malaysia, Indonesia and Singapore. Our vision of becoming a regional Islamic bank also acts as a strategic differentiator. Maybank is committed to creating value from these investments and the other footprints that it already has.

Headline KPIs

Target

FY11^

Actual

FY11^

Target

FP11

Actual

FP11*

Target

FY12

After-tax ROE (%) 14.0 15.2 16.0 16.2 15.6Loans and debt Securities

Growth (%)14.0 22.6 13.0 16.3 15.2

Note: * Based on Six Month FP (Jul 2011 December 2011), in line with Group’s transition from FYE June^ to FYE December.

2009

2010

2011

590

1,361.6

1,745

May-04 May-06 May-08 May-10 May-12

MAYBANKKLCI ex GLC-20

0.0

100.0

200.0

300.0

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 69: transformation programme

pg 68

MALAYSIA BUILdING SOCIETY BERHAd

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 57 146 325Net interest income (RM’m) 162 177 206Loan assets (RM’m) 8,118 10,707 15,185Market cap (RM’m) 707 1,043 2,285ROE (%) 11 31 43

Headline KPIs

Target

11

Actual

11

Target

12

ROE (%) 15.0 43.1 15.0Revenue Growth (%) 25.0 64.9 25.0

Achievements

Financial performance meeting targets and on the rise• AchievedaPBTofRM428mforFY2011,anincreaseof107%ascomparedtothePBT

of RM207.4m for FY2010.• Netloan,advancesandfinancingstoodatRM15.2b,anincreaseof42%ascompared

to RM10.7b as at 31 December 2010 which exceeded the banking industry’s average growth rate of 13.6%.

• AchievedaheadoffullyeartargetforallHeadlineKPIs2011.• Declareddividendof12%.

Enhancing customer value proposition and improving service level• EstablishmentofaCustomerCallCentre.• Expandedbranchnetworkwiththeopeningof2full-fledgedSalesandServiceCentres

(“SSCs”) and 6 Representative Offices (“REPs”).• ExtendedservicesatSSCtocollectionofpayment forAstro,U-mobile&CelcomBills

(epay).• Upgradedbranchimage.

Improved operational platform• Achievement of ISO 9001:2008 certification for Project Management and Monitoring

Division.• EnhancementofdataminingsolutionswithSASRapidPredictiveModeler.• GrantedaccessintoCCRIS.

Increased focus on customers and society• Enhanced our PINTAR School Programme by adopting 6 new schools i.e Sekolah

Kebangsaan Unggun, Sekolah Kebangsaan Haji Kelali Semera, Sekolah Kebangsaan Seri Geliga, Sekolah Kebangsaan Semenyih, Sekolah Kebangsaan Parit Penghulu and Sekolah Kebangsaan Telok Jamat.

• Participated in “ProgramSejahtera”which aimed at improving the living conditions ofdisadvantaged families nationwide through construction of new homes.

• UndertheHomeSafetyProgramme,MBSBcontinuedtoeducateMalaysianbydistributingHome Safety Video CDs nationwide.

Achievements

Awards & Accolades (continued)i. The Edge Billion Ringgit Club (Finance Sector)

• BestPerformingStock–HighestReturntoShareholdersover3years.• HighestProfitGrowthCompany–HighestgrowthinProfitBeforeTaxover3years.• Ranked2nd for Most Profitable Company.

ii. KPMG Shareholder Value Award 2011• Top100ValueCreatingCompanyfor2010(ranked2nd in financial sector).

iii. Malaysia Corporate Governance Index by Minority Shareholders Watchdog Group• Top100listofpubliclistedcompanies.• ReceivedSpecialMentionandwasratedanAcompany.

Challenges

Stay competitive with the industry• Liberalisationofbankingsystemandconsolidationofdomesticbanks.• PressureonNIMofcertainproductsduetoundercuttinginrates.

Reaching a wider market• SmallbranchnetworkandabsenceofATMfacilities.

Source and Retain of Talents• Scarcityof talentsatstrategicmanagement level incertainareassuchassyariah, risk

management and staff pinching remains a common occurrence in the industry.

TSR Index Economic Profit (RM’m)

2009

2010

2011

12.4

93

208.3

May-04 May-06 May-08 May-10 May-12

MBSBKLCI ex GLC-20

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 70: transformation programme

pg 69

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 35 67 77Operating cashflow (RM’m) 594 237 4Net cash/(debt) (RM’m) -825 -1,197 -2,108Market cap (RM’m) 1,243 2,750 2,994ROE (%) 5 7 6debt-to-assets (%) 54 48 60Operating margin (%) 11 13 12

TSR Index Economic Profit (RM’m)

Achievements

Major infrastructure project delivery, commencement of works and strong capital management practices• TheongoingdevelopmentsvaluedmorethanRM4binKualaLumpurSentralby2013.• CompletedthefirstofficedevelopmenttocomplywiththeBCAGreenMark(Singapore)

and GBI (Malaysia) standards in Kuala Lumpur Sentral. Another ongoing development to comply with LEED (US) by 2013.

• TheBrandLaureateConglomerateAwards2011.• ACCAMaSRA2011–shortlist.• StevieInternationalBusinessAwards2011DistinguishedHonoreeforBestEnvironmental

Responsibility programme of the year for its contribution to PINTAR Program and Green Building initiative.

• TheEdgeBillionRinggitClub2011.

Continuous support to Malaysia’s economic development and ETP• JVwithPelaburanHartanahBerhadtodevelopanintegratedtransporthubinPenangthat

will stimulate economic growth in Northern Peninsular Malaysia.• CommencementofStRegisResidence&HoteldevelopmentinKualaLumpurSentralto

establish a new benchmark in the Malaysian hospitality industry and services sector.• TransformationofLittleIndiainBrickfieldsandJalanTraversintoavibrantandconducive

environment for business and living for the community.• Ongoingdevelopmentofa1.2msqftofficetoweranda1.2msqftresidentialcondominium

in Kuala Lumpur Sentral to be completed by 2016.• ParticipatedintwoCareerDayeventsinMarchandApril2011insupportofGovernment’s

call for job opportunities for youth.

Focused on employee welfare• High Achiever Award to reward employees’ children that have achieved excellent

academic results in their PMR, SPM and STPM.

Continuous support towards environmental and social development• WorkingtowardsriverrehabilitationworksinGreaterKualaLumpur.• Continuouswork done on “greening” of Kuala Lumpur Sentral and donation towards

establishing Taman Botani Perdana under the green initiatives of the Greater Kuala Lumpur development plan.

• DonationtoYayasanPenerajuPendidikanBumiputeratoenablemoreBumiputeraachievehigh-income employment.

• Donation on upgrading themosque and staff quarters atMajid Jamek Pasir Pelangi,Johor Bahru and flood victims in Pagoh, Johor.

Challenges

Susceptibility to external factors• Weaknessofdemandforoverallpropertyparticularlyhigh-endresidenceduetoeconomic

conditions, excess supply and tightening of end-financing.• Increaseincostofrawmaterialsandimportedgoodsexpectedtonegativelyimpactprofit

margins (particularly when contract prices are fixed regardless of the increase in the world commodities market).

• Slowpaymentsfromclientsaffectingworkprogressandcash-flow.

MALAYSIAN RESOURCES CORPORATION BERHAd

Headline KPIs

Target

11

Actual

11

Target

12

Group Revenue (RM’m) 1,300 1,213 1,500New Property Sales (RM’m) 800 734 1,000New Order Book Growth for Engineering, Infrastructure and Others (RM’m)

1,000 1,413 1,200

Group PBT (RM’m) 150.0 107.3 130

2009

2010

2011

-28

-57.1

-95.50.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

May-04 May-06 May-08 May-10 May-12

MRCB

KLCI EX GLC-20

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 71: transformation programme

pg 70

Historical Performance

FYE 30 June 2009 2010 2011

Net profit (RM’m) 2,280 727 3,665Operating cashflow (RM’m) 897 3,531 3,175Net cash/(debt) (RM’m) -2,297 -3,098 -2,151Market cap (RM’m) 53,905 52,883 55,287ROE (%) 11 3 16debt-to-assets (%) 9 13 8Operating margin (%) 10 6 13

Achievements

Record Financial Performance in FY2011• Netprofit :RM3,665m(+404%YoY)• Revenue :RM42b(+39%YoY)• ReturnonAverageShareholders’Funds(ROASF):16.5%

Strategy• Completionofthe5-YearStrategyBlueprintandPortfolioReviewFrameworkinFY2011

Strategic AchievementsPlantation division• Largestproducerof sustainablepalmoil in theworld (1.7millionMTasof31st March

2012) • As of March 2012, 55 Strategic Operating Units (SOUs) have been certified by the

Roundtable Sustainable Palm Oil (RSPO), covering a total planted hectarage of 460,000. Target to have all 62 SOUs certified by end December 2012.

• LaunchingofSimeDarby’sfirstCentralHousingComplexforoilpalmplantationworkersat Tennamaram Estate, Selangor.

Property division• StrategicpartnershipwithEastern&OrientalBerhad(E&O)throughtheacquisitionofa

30%stakeinE&O.• Strategic partnership with CapitaMalls Asia to develop a shopping mall in the Klang

Valley.

Industrial division• CompletionoftheacquisitionofBucyrusdealershiprightsfromCaterpillarinDecember

2011.

Motors division• Openingof5newshowroomsinChinaand2newshowroomsinMalaysia.

Energy & Utilities• Completionofthedisposaloftheoil&gasfabricationyardsinApril2012.

Healthcare• TheofficiallaunchingofSimeDarbyMedicalCentreAraDamansarainMarch2012.

Awards & Challenges

Awards & AccoladesProperty division• #2inTheEdgePropertyDeveloperAward2011.• GoldAward,PropertyCategory,PutraBrandsAward2011.• BCIAsiaTop10DevelopersAward2011,2012.• GoldAward,Reader’sDigest2011TrustedBrandAward.• Prime Minister’s Hibiscus Award 2012 for Notable Achievement in the Environmental

Excellence category.• Special Achievements for Sime Darby Idea House (prototype of the 1st zero carbon

residence in South East Asia).

a. FuturArc Green Leadership Awards 2011 by BCI Asia.

b. Gold Rating for Green Building Index (GBI) Certification.

Motors division• No.1LuxuryBrandinSingapore,HongKong&Macauin2010,2011.• World’sSecondLargestRollsRoyceDealer.• LargestMINImarketshareacrossallMINIoperationsintheworld(2.7%ofTIV).

Healthcare division• ReaderDigests’PeopleAward2010.• MalaysiaHealthcareTravelCouncilCertification.• MalaysianSocietyforQualityinHealth(MSQH)re-accreditation.

Corporate Social Responsibility • ChildProtectionPolicyProgramme(CPP).• Humana Programme (providing educational opportunities to the children of plantation

workers).• SimeDarby–MyKasihFoodAidProgramme.• SaveOurWaterfalls(AWaterfallCleanupInitiative).• ProjectRhizo(MangroveReforestationInitiative).

Challenges• Deepening of the European debt crisis causing a slow down in the global economy,

volatility in commodity prices and fluctuating foreign exchange.• WeakeningofChina’seconomyresultinginnegativeimpactacrosskeybusinesses.

TSR Index Economic Profit (RM’m)

SIME dARBY BERHAd

Headline KPIs

Target

11

Actual

11

Target

12

Return on Average Shareholder’s Funds (ROSF) (%)

11.5 16.5 13.3

Net profit (RM’m) 2,500 3,665 3,300

2009

2010

2011

290.6

-1,232.4

1,581.20.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 May-12

SIME DARBY

KLCI EX GLC-20

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 72: transformation programme

pg 71

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 54 89 125Operating cashflow (RM’m) 7 187 159Net cash/(debt) (RM’m) -77 -36 17Market cap (RM’m) 712 1,016 1,079ROE (%) 13 19 22debt-to-assets (%) 11 5 NAOperating margin (%) 26 42 43

Headline KPIs

FY december 31 Target

11

Actual

11

Target

12

Return on Equity (%) 19.0 21.95 19.0FFB per hectare (mt/ha) 22.03 22.39 22.07dividend To distribute

approximately 50% of Group’s Annual PATAMI

First and final single tier dividend of 12.50 sen per share. This translates into a net payout of 50.8% of the Group’s PATAMI

To distribute approximately 50% of Group’s Annual PATAMI

Landbank Increase To expand our lanbank to 50,000 Ha by 2012

Targeted to surpass, one year ahead of our target time as we have entered into Conditional Sale&PurchaseAgreementsto materialise this target and it would then increase our landbank to 59,153 Ha.

TSR Index Economic Profit (RM’m)

Achievements

Financial Portfolio Value Creation• Anincreaseof40%innetprofits.• Healthyshareholders’fundsofRM624m.• Declaredafirstandfinalsingletierdividendof12.50senpershare,translatedintoanet

payout of 50.8% of the Group’s PATAMI.

Landbank Expansion• Maiden regionalexpansion in Indonesiaofapproximately14,180Haofplantation land

and acquired approximately 5,602 Ha of plantation land in Sarawak by entering into Conditional Sale and Purchase of Shares Agreements.

Supporting The National Agenda• THPAgroManagementSdnBhd (wholly ownedsubsidiaryof THP), themanagement

agent for the joint development between Lembaga Tabung Haji, the State Agency and the Natives, are jointly developing the Native Customary Rights land located in Beladin and Simunjan, Sarawak totalling approximately 2,600 Ha. The ventures are aimed at eradicating poverty and expected to benefit the natives.

Awards & Accolades• Nominatedin3categoriesfortheplantationssectorawardsbyTheEdgeBillionRinggit

Club 2011 namely 2nd Most Profitable Company in its sector and ranked 4th place in Best Performing Stock and the Highest Profit Growth Company categories.

• The Chief Executive Officer was awarded the Industry Merit Award in the AgricultureSector by The Kuala Lumpur Malay Chamber of Commerce Malaysia Business.

• BestChief FinancialOfficer for InvestorRelations (SmallCap) awardby theMalaysianInvestor Relations Association.

Challenges

Labour Issues• StricterenforcementandleviesimposedontherecruitmentofforeignlabourinMalaysia.• Labourerare lured to return to theirhomelandas theplantation industry in theirnative

country are progressing.

Threats by Western NGOs • DiscriminatorymeasuresbyNGOstoharmoilpalmindustry,fromaccusationsoframpant

deforestation and unsound environmental practices to unfair treatment of farmers and indigenous people.

Humanising the Business• Ensuring our talent force constantly reinvents its skills and aptitudes to remain highly

effective, competitive and importantly empathetic.

TH PLANTATIONS BERHAd

2009

2010

2011

25

72

79

0.0

200.0

400.0

600.0

800.0

Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 May-12

THP

KLCI EX GLC-20

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 73: transformation programme

pg 72

Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 643 1,207 1,191Operating cashflow (RM’m) 3,224 3,088 3,156Net cash/(debt) (RM’m) -2,928 -1,184 -1,759Market cap (RM’m) 10,945 12,555 17,742ROE (%) 7 16 16debt-to-assets (%) 29 13 20Operating margin (%) 12 15 14

Headline KPIs

Target

11

Actual

11

Target

12

Revenue Growth (%) 2.5 4.1 5.0EBITdA Margin (%) 32.0 33.5 32Customer Quality Perspective TRI*M score

of 70 (see Note 1)

TRI*M score of >70

TRI*M score of 72

Achievements

Achievement of All Headline KPI for 2nd Consecutive Year• Achievedrevenuegrowthof4.1%.• NormalisedEBITDAMarginat33.5%.• CustomerSatisfactionMeasure,orTRI*Mscoreof>70.

Key Milestones delivered• Maintainedleadershipinbroadbandsegmentwith1.9millioncustomers,up12.3%from

1.7 million in 2010.

Revenue Growth

• RevenueofRM9,150.7min2011is4.1%higherthanRM8,791mrecordedin2010.• Non-voice (data and Internet & multimedia) revenue continues to surpass voice,

contributing to 59% of revenue.• Internet&Multimediarevenuewasmaindriverat21.2%growth.

Continued Commitment to Shareholders Value Creation• DelivereddividendcommitmentofRM701.2m.• Proposed capital repayment by way of capital reduction of 30 sen per share, or

RM1,073.2m.

Balance Sheet Management• Continuousdivestmentofnon-coreassets,i.e.disposalofbalanceofAxiatashares.

Global Recognition for High Speed Broadband Project• FTTHCouncilclaimsthatTMhasthehighestnumberofHSBBsubscribersinSoutheast

Asia and amongst the Top 10 in Asia Pacific.• FastestHSBBrolloutsgloballywiththe lowestcost,given itswideandcomprehensive

scope.

Challenges

Arresting decline in Voice Services Revenue• Althoughataslowerpace,decline iscontinuingyear-on-yeardue to lowerusageand

fixed-to-mobile substitution. However, this is mitigated by growth in the internet &multimedia and revenue.

• Effortstoarrestdeclinethroughimprovedofferingintermsofserviceandprice.

Competition in Broadband Space• Competitionfrommobile,WiMaxandnewHSBBproviders.• Thereisstillroomforgrowthasbroadbandpenetrationrateiscurrently62.3%.

Capex Management• Careful management of HSBB and “Business-as-usual” capital expenditure spend

remains crucial along with continued implementation of cost management initiatives. This is compounded by the challenge of maintaining two concurrent networks while TM undergoes transition to an all-IP Next Generation Network (NGN) as well as high takeup of Unifi customers and the need to maintain quality of service.

Regulatory• Regulatory support remains important in light of increasingly competitive industry

landscape to ensure equitable and balanced industry structure and fair returns on HSBB network investments.

TSR Index Economic Profit (RM’m)

TELEKOM MALAYSIA BERHAd

Note 1: Starting 2011, TM will be using TRI*M index to measure end to end customer experience at all touch points. TRI*M (Measuring, Managing and Monitoring) is a standardised indicator system. It analyses, measures and portrays stakeholder relationships on the basis of standardised indicators. The TRI*M Index is an indicator of the status quo of a particular relationship. The index is made up of four points of view on the stakeholder relationship, e.g. for customer loyalty: overall rating, recommendation, repeat purchasing of product/services, and a company’s competitive advantage. The information is based on surveys/interviews on a sample customer base.

2009

2010

2011

-29.4

-68.1

-27.6

0.0

100.0

200.0

300.0

400.0

500.0

600.0

May-04 May-06 May-08 May-10 May-12

TM

KLCI EX GLC-20

Source: G20 Reporting, Bloomberg, PCG Analysis

Page 74: transformation programme

pg 73

Historical Performance

FYE August 31 2009 2010 2011

Net profit (RM’m) 918 3,202 500Operating cashflow (RM’m) 6,396 7,070 4,410Net cash/(debt) (RM’m) -16,431 -12,839 -15,077Market cap (RM’m) 36,465 36,498 32,195ROE (%) 4 12 2debt-to-assets (%) 39 31 33Operating margin (%) 13 14 4

TSR Index Economic Profit (RM’m)

Achievements

Improved financial performance• TheGroupreportedanincreasedintotalrevenueof6.2%toRM32.21b.• OutstandingdebtofRM19.1b(in2004,RM32.5b).• Achievedgearinglevelat38.6%.• Effectiveweightedaveragecostsoffunds(debt)of5.1%.

Improved operational efficiencies• ReportedTransmissionSystemMinutesof1.0minutes.• Achieved Distribution SAIDI of 78.9 minutes which was above the targeted 85 – 93

minutes.

Accolades• TNBPresident/CEOawardedLifetimeAchievementAward,AsianUtilityIndustryAward

2012, Singapore.• TNB’sPresident/CEOhasbeenawarded the ‘MalaysiaHallofFameAchievementand

Special Achievement Award – Individual’ in the 1st Malaysia Achievement Summit &Awards (MACA) held on February 23, 2012.

• TNB has been awarded the BrandLaureate Awards 2010-2011 for Best Brands inCorporate Branding – Best Brands in Energy Utilities.

• TNBleapt159spotstorankasthe550th world’s biggest company in the list of Forbes Global 2000 for the year 2011.

• TNB has been chosen as the 72nd world’s largest company in the electricity supply business, according to the Top 100 Global Electricity Suppliers Industry Analysis published by Plimsoll. TNB was also listed as the 45th highest income company in terms of business profits.

• TNB’sChairmanhasbeennominatedastherecipientfor‘OutstandingPersonalityAward’while TNB Integrated Learning Solution Sdn. Bhd. – ILSAS received the ‘Energy Industry: Category Provider’ on 11 October 2011.

• TNBhasbeenselectedas thewinnerof the ‘AsiaForum2011GeospatialExcellenceAward’.

• TNBhasreceivedthe‘RiskManageroftheYear2010’awardbytheMalaysianAssociationof Risk and Insurance Management (MARIM) at the MARIM annual conference held in Genting Highlands on 18 October 2011.

• TNBhasbeenannouncedasthewinnerforthe‘2011CorporateAward–Tier4,Category1’ by the Institute of Internal Auditors Malaysia (IIA Malaysia).

• TNB has been awarded thewinner of Excellence Award (Public Listed Company) forNational Award for Management Accounting (NAfMA) 2011.

• UniversitiTenagaNasional(UNITEN)istobehonouredwiththeIQCInternationalQualityCrown Award in the Gold Category on November, 2010.

Challenges

• TNBhasexperiencedunprecedentedhighutilisationofMFO&distillatedduetoseveregas shortage resulting in additional (differential) fuel cost in excess of RM3b.

• Persistentlyhighcoalprice(averageUSD107/tonne)ascomparedtoallowabletariffpassthrough of USD85/tonne under approved tariff.

• Moderatedemandgrowthinsalesi.e.3.1%forFY2011.• Highunplannedoutages(UOR)duetoforcedoutageincoalplantprimarilyduetocoal

plants being required to run beyond their design operating period in the prolonged gas supply situation.

• Moderate progress in diversification of its revenue base (non-regulated revenue) &international operation due to uncertain world economic condition and highly competitive international power business environment.

Headline KPIs

Target

11

Actual

11

Target

12

ROA (%) (*exclude gas cost sharing)(# coal price USD85/mt; gas price RM10.7/mmbtu)

4.5# 2.1 2 – 3

CPU (sen/kwh) (*opex 38.19 billion, coal price USD94.74/mt; gas price RM10.7/mmbtu)

29 – 29.5* 32.7 32.7 – 33.7

Unplanned Outage Rate (UOR) (%) 3.6 -<4.0 7.1 3.6 – <4.0

T&d Losses (%) 9.0 – <9.5 9.0 8.7 – <9.0Transmission System Minutes (mins) 1.0 – 2.5 1.0 1.1 – 2.0

distribution SAIdI (mins) >85 – 93 78.9 >75 – 80Revenue from Non Regulated Business (RM)

1.8 – 1.9 1.8 1.8 – 1.9

TENAGA NASIONAL BERHAd

2009

2010

2011

-1,572.5

-1,239.2

-4,112.2

0.0May-04 May-06 May-08 May-10 May-12

50.0

100.0

150.0

200.0

250.0

300.0 TNB

KLCI EX GLC-20

Source: G20 Reporting, Bloomberg, PCG Analysis

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Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 621 242 3,647Operating cashflow (RM’m) 2,112 2,347 1,964Net cash/(debt) (RM’m) -9,619 -9,429 -1,091Market cap (RM’m) n/a n/a n/aROE (%) 8 3 48debt-to-assets (%) 44 43 10Operating margin (%) 38 35 3

Headline KPIs

Target

11

Actual

11

Target

12

Revenue Growth (%) 10.0 10.3 -18.5ROE (%) 5.9 47.83* 3.48

* Including one-off gain from disposal of local expressways operations to a joint venture between UEM and EPF

Achievements

• TheacquisitionofSunriseBerhadwascompletedon16February2011byUEMLandHoldings Berhad. With the acquisition, UEM Land has emerged as one of the dominant market players in terms of revenue and assets base in the Malaysian property development sector.

• As part of the continuous efforts to strategically streamline the core business of thecompany, UEM Group completed its disposal of its 87% stake in Pharmaniaga Berhad to Boustead Holding Berhad for RM534m on 25 March 2011.

• UEM Group and the Employee Provident Fund, as Joint Offerors, issued an offer toacquire all of the business and undertaking of PLUS Expressway Berhad for RM23b. The Proposed Disposal and Distribution were completed on 29 November 2011 and 23 December 2011 respectively.

• UEM Land & Iskandar Harta Holdings Sdn Bhd have entered into a ShareholdersAgreement to jointly undertake the mixed development project in Medini, Nusajaya. The entire development will have a Total Gross Floor Area (GFA) of 2 million square feet and will be connected to LEGOLAND Malaysia.

• E-Idaman,aJVcompanybetweenUEMEnvironmentandMetacorpBerhad,hasbeengranted a 22-year concession to manage soild waste collection and public cleansing management in northern states.

• PEBhadreceivedthefollowingawards;BestPracticeAwardforPublicListedCompanyfrom the National Award for Management Accounting (NMFA), Transportation, Travel &TourismAward fromPutraBrandAwards2011&NationalAnnualCorporateReportAwards (NACRA).

• UEM Land emerged as the runner-up in the FIABCI Prix d’Excellence Award (PublicInfrastructure/Amenities Category) for Kota Iskandar.

• SunrisereceivedTheEdgeTopPropertyDeveloperAwards2011andalsowasvotedasthe Best Property Management Company during the 2011 Editors’ Choice Awards.

• Faberhad received the followingawards;FacilitiesManagementCompanyof theYearfrom Frost & Sullivan Malaysian Excellence Awards, Best Practices-Healthcare AssetManagementfromInstituteforInfrastructureAssetManagement&StarBizICRMalaysiaCorporate Responsibility Awards.

Challenges

• UEMGroupBerhadhasidentifiedfivekeyareasoffocustobepursuedasthelongtermSustainability Plan.

TSR Index Economic Profit (RM’m)

UEM GROUP BERHAd

2009

2010

2011

66.1

-541

-231

0.0Nov-08 Nov-09 Nov-10 Nov-11 May-12

200.0

400.0

600.0

800.0 UEM LAND

KLCI EX GLC-20

Source: G20 Reporting, Bloomberg, PCG Analysis

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Historical Performance

FYE december 31 2009 2010 2011

Net profit (RM’m) 382 527 502Operating cashflow (RM’m) 802 1,050 1,386Net cash/(debt) (RM’m) -411 -488 -375Market cap (RM’m) 7,108 8,097 8,178ROE (%) 10 14 12debt-to-assets (%) 8 8 6Operating margin (%) 7 9 9

Headline KPIs

Target

11

Actual

11

Target

12

Return on Shareholder Fund (%) 10.0 12.1 10.0dividend Pay Out (%) 50 72.7 50

Achievements

Achievement of All Headline KPI for 2nd Consecutive Year• Group revenue of RM13,535.8m for the financial year ended 31st December 2011,

surpassed the RM12,820.2m recorded in 2010 by RM715.3m or 5.6%.• GroupprofitbeforetaxationofRM1,381.5m,improvedovertheRM1,313.2machievedin

2010 by 5.2%, an increase of RM68.3m.• UMWachievedit’stargetHeadlineKeyPerformanceIndicators(KPI)for2011asstated

below:(a) Annual Return on shareholder fund of 12.1% against target of minimum 10.0%.

(b) Annual dividend pay out ratio of 72.7% against target of at least 50.0%.

• Total Toyota and Perodua vehicle sales of 270,440 units represented 45.1% of theTotal Industry Volume (“TIV”) of 600,123 despite production disruption caused by the earthquake and tsunami in Japan as well as massive floods in Thailand during 2011.

• Operatingprofitofoil&gassegmentreturntoprofitabilityin2011asaresultof:• Naga1contractextendedbyPetronasCarigaliSdnBhdforanother5yearsata

higher operating rate.• FullyearcontributionfromNaga2.• Naga3wascontractedtoPetronasCarigalisinceMarch2011.• IncreaseinplantcapacityutilisationbyUnitedSeamlessTubulaarPrivateLimited’s

new OCTG plant in India.

Challenges

Automotive• TheMalaysianAutomotiveAssociationforecast2012TIVtoimproveto615,000unitsfrom

the 600,123 units recorded in 2011. Collectively, Toyota and Perodua target to sell a total of 281,000 units, an increase of 3.9% over the 270,440 units sold in 2011. Competitions will remain stiff with the introduction of new models by other car manufacturers.

Heavy Equipment• Revenueisexpectedtomaintainat2011levelasstrongerdemandforminingequipment

is likely to be offset by lower contributions from:• theloggingsector,asdemandfortimberisexpectedtoreturntonormalcyin2012.• saleoffiretrucksasdemandisexpectedtobelowin2012afterthemajordelivery

in 2011.

TSR Index Economic Profit (RM’m)

UMW HOLdINGS BERHAd

2009

2010

2011

281.6

544.7

626.1

0.0May-04 May-06 May-08 May-10 May-12

500.0

300.0

400.0

200.0

100.0

UMW

KLCI EX GLC-20

Source: G20 Reporting, Bloomberg, PCG Analysis

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Appendix d – Awards Received By GLICs And G20 (2011 & 2012)

Financial Insights Innovation Awards• Winner of the Loan Origination category In recognition of CIMB's innovation and business

strategiesWall Street Journal• FFIN Investment Bank was ranked jointly at 21st in Asia’s Best Brokers category, with its Chief

Analyst rated No 1 in the utilities sector in AsiaMalaysian Rating Corporation Berhad• AFFIN Investment Bank was accorded Lead Managers league table 2010 achievement award

for No 1 in issue count (conventional) and No 2 in issue value (conventional)

Asia Pacific Brands Foundation (APBF) • BrandLaureate CEO of the Year 2010-2011Forbes Asia’s Fabulous 50 AwardFrost & Sullivan Asia Pacific ICT Award• Best Telecommunications Group of the YearMalaysian Corporate Governance Index Awards• Best Conduct of AGM• Distinction AwardTelecom Asia Awards• Best Regional Mobile GroupCELCOM AXIATA BERHAdFrost & Sullivan Malaysia Excellence Awards• Service Provider of the YearMalaysia 1000 Award• Return on Capital Employed Award 201111th PC.com Awards• Best Wireless Broadband Award 2011

The BrandLaureate• Best Brands in Financial Services – InsuranceThe Edge• 3rd company with the highest compound growth in profit before tax over 3 yearsThe Leaders International• Global Leadership Awards 2011 in Islamic Banking SectorMOSTI• Malaysia Service to Care Awards 2011 for Islamic bankReader’s digest• The Platinum Trusted Brand Award 2011 for Islamic Financial ServicesThe Asia Pacific Brands Foundation (APBF)• Best Brands in Banking – Islamic BankCelcom• Recognition of paving the way of innovative wireless ATM implementation

Turbomeca Asia Pacific • 1 million flight hours on fleet of helicopter equipped with Turbomeca Engines• (MHS Aviation Berhad)GradMalaysia.com• Top 100 Leading Graduate Employers 2011 (Pharmaniaga Berhad)Roundtable on Sustainable Palm Oil• RSPO Accreditation for sustainable palm oil production under Sungai Jerneh Business Unit

(Boustead Estate Agency Sdn Bhd)

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Malaysia International Gourment Festival– for The Royale Chulan Hotel• Winner of Festival Diner’ Choice – Most Outstanding Cuisine• Winner of Festival Diner’ Choice – Most Outstanding Overall Dining Experience• Winner of Judges’ Choice – Best Value Menu of the Festival

Financial Insights Innovation Awards• Winner of the Loan Origination categoryHalal Industry development Corporation• Halal Recognition AwardAjinomoto • Appreciation for Long Standing Partners and SuppliersGuardian• Customer Choice Award 2011 for Champs (Kids Supplement Category)Watson Health• Wellness & Beauty Award 2011 for Naturalle Garlic• Wellness & Beauty Award 2011 for Flavettes C Sugar FreeSIRIM• ISO 9001:2008 Quality Management Systems• ISO 14001:2004 Environmental Management Systems

ASEAN Business Awards• Most Admired ASEAN Enterprise for the Employment category – Large Size CompanyAsiamoney• Country Deal of the Year for Malaysia – Deal: Bumi Armada USD888m IPOAsia Asset Management• Islamic Fund House of the Year in MalaysiaAlpha Southeat Asia Magazine• Best Investment Bank in ASEAN• Best Equity/IPO Deal of the Year in Southeast Asia – Deal: Bumi Armada’s USD888m IPO• Best Local Currency Bond Deal of the Year in Southeast Asia – Deal: Khazanah Nasional via

Danga Capital’s CNY500m sukuk• Best Islamic Finance/Most Innovative Deal of the Year in Southeast Asia – Deal: Government

of Malaysia’s USD1.2b & USD800m Wakala Global Sukuk Corporate Governance Asia• Corporate Governance Asia Recognition Awards 2011Euromoney• Best Investment Bank in Malaysia• Best Bank in Malaysia• Best Islamic Bank in AsiaFinance Asia• Best CEO – Dato’ Sri Nazir Razak: CIMB Group• Best Investor Relations: CIMB Group• Best Islamic Finance House• Best Islamic Financing – Deal: Malaysia’s USD2b dual-tranche global sukukGlobal Finance• Best Islamic Institution in Asia & Best Consumer Internet Bank in Malaysia

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Islamic Finance News Awards• Cross-Border Deal of the Year – Deal: Danga Capital CNY500m Islamic Trust Certificates• Sovereign Deal of the Year – Deal: Wakalah Global Sukuk• Most Innovative Islamic BankMinistry of Human Resources, Malaysia• Anugerah Majikan Prihatin/Malaysia’s Most Caring Employer (large company)Minority Shareholder Watchdog Group• Best CSR Award – In recognition of CIMB Group Holdings Berhad’s best CSR practicesThe Asset Triple A• Deal of the Year in Malaysia – Deal: Hong Leong RM5.06b acquisition of EON CapitalThe Asian Banker• Best Social Media EngagementThe Edge• Best Share Placement – Deal: S P Setia Bhd. RM884.7m Primary Placement• Best IPO – Deal: Bumi Armada Bhd. RM2.7b IPO• Best Overall Fund Group Award• CIMB Islamic Equity Fund: Equity Asia Pacific Ex-Japan (Islamic), 3 yearsTrade Finance Awards For Excellence• Best Trade Bank in Malaysia & Best Islamic Trade Bank in Asia

MAMPU (Malaysia Administrative Modernisation and Management Planning Unit)• 5 Star Rating for Service DeliveryTower Watson – ranked EPF as the ninth largest pension fund in the world

ISO / IEC 20000-1:2005• Provident Fund System (PFS), IFAMS, MyEPF, Exchange Email & Sharepoint Portal and

HRMSIdC Enterprise Innovation Awards

SGAM (Share Guide Association of Malaysia) Enterprise Security Excellence Awards 20115 Star Rating for my EPF (Web portal) by MGPWA

KLIFF Awards• Most Outstanding Islamic Finance ProductThe Asset Triple A Islamic Finance Awards• Best Corporate SukukThe Banker• Deals of the Year 2011: Islamic FinanceMalaysian International Islamic Financial Centre (MIFC)• EMAS SukukAlpha Southeast Asia• Best Local Currency Bond Deal of The YearIslamic Finance News• Cross-Border Deal of the YearThe Asset Triple A Regional Awards• Outstanding Issuer 2011Alpha Southeast Asia• Best Borrower of the Year in South East Asia 2011

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National Audit department

• The Financial Management Performance Accountability Index Award 2010 with 4 stars rating

Skytrax World Airport Awards• Winner of the World’s Best Airport Immigration Service AwardAsia Responsible Entrepreneurship Awards South East Asia• Winner of the Green Leadership AwardMinority Shareholder Watchdog Group (MSWG)• Malaysian Corporate Governance Index A+ Distinction AwardWorld Travel Awards• Asia’s Leading AirportHotel – Pan Pacific Kuala Lumpur International Airport • Global Luxury Airport Hotel – Pan Pacific Kuala Lumpur International Airport BrandLaureatte Awards• Best Brands in Airport Hotel category – Pan Pacific Kuala Lumpur International AirportEarthCheck• KLIA awarded Earth Check Gold Certification for six years in a rowSkytrax World Airport Awards• KLIA is the Winner of the Best Airport Staff Asia Award• KLIA improved its place in the SKYTRAX 2012 world’s top 10 airports with an 8th place finish,

one spot better than last yearPacific Asia Travel Association (PATA) Aviation Committee• Inaugural award for “Exceptional Service to Aviation” to Tan Sri Bashir Ahmad, the Managing

Director of Malaysia AirportsMS1900:2005 Quality Management System from Islamic Perspectives• MAHB is the first GLC to secure MS1900:2005 Quality Management System from Islamic

Perspectives, when its subsidiary, Malaysia Airports Consultancy Services (MACS) received the MS1900:2005 certified by SIRIM QAS International

World Travel Awards• World’s Leading Airline to Asia 2011• Asia’s Leading Airline 2011 (Asia & Australasia)• Asia’s Leading Airline Lounge (Asia & Australasia)Employer Branding Institute, World HRd• Asia’s Best Employer Brand Award 2011Malaysian Institute of directors (MId)• Innovative Leadership in GlobalisationThe Centre for Asia Pacific Aviation (CAPA) • IT Innovation of the Year 2011Top Travel Magazine, China• China Region – Best Service Brand Board of Sabah Tourism• Hong Kong Station – Best Airline StationKL Mayor Tourism Award• Going Places Inflight Magazine – Award of Excellence (Magazine Category)Advertising & Marketing Magazine• Going Places Inflight Magazine – Regional Travel Magazine of The Year (3rd place)

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Magazine Publishers Association • Going Places Inflight Magazine – Best Cover in Special Interest/Niche – English Category

(Aug 2011 Cover – Gold)Aviation Week’s Overhaul & Maintenance magazine• Aerospace & Engineering – Top Airline Affiliated• Aerospace & Engineering – Top 10 Airframe The Leaders International (An Elite Corporate Magazine)• Firefly – Global Leadership Awards 2011

The Edge Billion Ringgit Club • Best Performing Stock – Highest Return to Shareholders over 3 years• Highest Profit Growth Company – Highest growth in Profit Before Tax over 3 yearsKPMG Shareholder Value Award• Top 100 Value Creating Company for 2010 (ranked 2nd in Financial Sector)Minority Shareholder Watchdog Group• Top 100 Companies under Corporate Governance Index and given Special Mention for being

rated A company

The Brand Laureate Awards• Best Conglomerate Award 2011Association of Chartered Certified Accountants (ACCA) • Shortlist, Malaysia Sustainability Reporting Awards (MaSRA) 2011The Stevie International Business Awards, USA• Distinguished Honoree, PINTAR programme 2011• Distinguished Honoree, Green Building Initiative 2011The Edge Billion Ringgit Club• Member

Financial Times – The Banker, deal of The Year Awards• Equities / IPO / Equity Linked • Trade FinanceWorld’s Best Islamic Financial Institutions Awards • Best Sukuk Bank• Best Islamic Finance Deal of The YearIFR Asia Awards • Malaysia Bond House• Malaysia Equity House• Asia Islamic DealsFinanceAsia Country Awards • Best Trade Finance BankThe Asian Banker International Excellence in Retail Financial Services Award• Best Retail Bank in Malaysia • Best Deposit and Liability BusinessThe Asian Banker Achievement Awards Technology Implementations Awards• Best Retail Payment ImplementationEuromoney Awards• Best Private Banking Services Overall in MalaysiaBest debt House Awards • Best Debt HouseKLIFF Islamic Finance Awards• Most Outstanding Retail Islamic Bank Awards • Most Outstanding Takaful Company (Etiqa Takaful Berhad)

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Malaysia’s Most Valuable Brands – Putra Brand Awards – The People’s Choice• Finance Gold Award• The Triple Asset Award• Best Domestic Trade Transactions Banking• Best E-commerce Bank• Best Domestic Cash Management Bank• Best SME Bank• Best Domestic Trade Finance BankNEF-Awani ICT Awards• Favourite Online Banking under People’s Choice Awards• Favourite Online Banking Service ProviderInnovation Malaysia Awards• M2U mobile Payment AppMalaysian Takaful Association (Etiqa Takaful Berhad)• Best group Business OperatorNational Annual Corporate Report Awards (NACRA)• Most Outstanding Annual Report of the Year (Silver Award)• Best Corporate Social Responsibility Award (Gold Award)Transformational Corporate Leader Brand Icon Leadership Award• The Brand Laureate AwardVisa Malaysia Bank Award• Largest Consumer Credit Card Issuer

The BrandLaureate Awards

• Best Brands in Investment Holdings

The Edge Malaysia• The Edge Top Property Developers Awards 2011 – No 2 SC Cheah, PT Media – NST Property Times• SC Cheah Choice Awards 2011 – Best Township DeveloperAwarded by BCI Asia• BCI Asia Top 10 Malaysian Developers Award 2011 Awarded by the Association of Accredited Advertising Agents Malaysia• Putra Brand Awards 2011 – Gold Award (Property Development) Awarded by Readers’ digest Asia• Readers’ Digest Trusted Brands 2011 – Gold Award Awarded by BCI Asia• FuturArc Green Leadership Awards 2011 Awarded by Green Building Index Sdn Bhd• Gold Rating for Green Building Index (GBI) Certification Ministry of Industry• Green Industry Award – level 3Lloyd’s Register Quality Assurance Limited• ISO 14064-1:2006 (GHG Monitoring and reporting)Hyundai Motor Company• Hyundai-Sime Darby Motors Sdn Bhd – Global Distributor Of The Year 2010 AwardMalaysia Productivity Center• Inokom Corporation Sdn Bhd – MPC National Convention 3 Star Award (1 Project)• Quality Environment Award – World Class 5S Practices By MPC

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Kuala Lumpur Malay Chamber of Commerce Malaysia Business • Industry Merit Award: AgricultureMalaysia Investor Relations Association (MIRA)• Best Chief Financial Officer IR (Small Cap)The Edge Billion Ringgit Club• Highest Profit Growth Company (Ranked 4th)• Most Profitable Company (Ranked 2nd)• Best Performing Stock (Ranked 4th)

NEF-AWANI ICT Awards• People’s Choice Category – Favourite Telecommunication CompanyPC.COM 12th Readers Choice Awards• Best Wired Broadband UniFiFrost & Sullivan Malaysia Excellence Awards • Broadband Service Provider of the Year (6th time)• Managed Service Provider of the Year to VADS (3rd time)• Data Communications Service Provider of the Year (7th time)• Service Provider of the Year15th Annual Telecom Asia Award• Best Broadband Carrier AwardFrost & Sullivan Malaysia Excellence Awards• Broadband Service Provider of the Year• Data Communications Service Provider of the Year• Managed Service Provider of the Year• Managed Security Service Provider of the Year – VADS BerhadSambutan Hari Pekerja• Outstanding Employee (Executive)• Outstanding Employee (Non-Executive)• Best SloganSOCSO’s Return To Work Platinum Award • VADS Berhad• Asia’s Best Employer Brand Award 2011• Asia’s Best Brand Award 2011CIMA Enterprise Governance Awards• Second Runner-Up in the Overall Category• Merit Award for Corporate Social ResponsibilityACCA Malaysia Sustainability Reporting Awards• Reporting on Social PerformanceNational Annual Corporate Report Awards (NACRA) • Most Outstanding Annual Report of the Year – Platinum Award• Industry Excellence Award for Main Board Companies in the Trading and Services Category• Best Corporate Social Responsibility Award – Silver Award• Best Annual Report In Bahasa Malaysia – Silver Award• Best Designed Annual Report – Silver AwardPIKOM 25th Anniversary Gala dinner & ICT Leadership Awards• ICT Organisation Excellence Award• ICT Personality of the Year, Dato’ Sri Zamzamzairani Mohd Isa, Group CEOMalaysian Corporate Governance (MCG) Index & Awards• Industry Excellence in Telecommunications & Media• Best CSR• Distinction (A+)

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Financial Insights Innovation Awards• Winner of the Loan Origination categoryMajlis Penganugerahan Tahunan ke-11 Contact Centre Association of Malaysia (CCAM) • Silver award for “Best Video For Contact Centre”“IQC International Quality Crown Award in the Gold Category” • UNITEN – “IQC International Quality Crown Award in the Gold Category”CNY Greeting Ad Award • Anugerah “Grand Prize” – CNY Greeting Ad Award 2011 PresentationAnugerah BrandLaureate• TNB – Best Brand for Energy UtilityThe 2nd Asia Power & Electricity Awards• TNB – “Best Utility in Clean Energy Initiative Excellence”Asia HRd Award Congress • Asia HRD Congress Awards 2011 – Contribution to HR CommunityForbes Global 2000’ Year • TNB – position 550 of World Big CompanyThe Plimsoll Top 100 global Analysis – Electricity Suppliers• Syarikat yang ke-72 Terbesar di Dunia Dalam Bisnes Pembekalan Elektrik Malaysian Society for Occupational Safety & Helth (MSOSH) and OSH Award• TNB Business Units won the Gold Class I, Gold Class II and Silver AwardMajlis Global Leadership Awards • Best Energy Sector AwardQuality Environment Convention (QE)• UNITEN won Anugerah 3 Bintang (EMAS) for Quality Environment (QE) ISQ Award• Award (ISQ) 2011 for a category of “Quality College & University 2011”Asia’s Best Employer Brand Award • TNB won 2nd Asia’s Best Employer Brand Award

Frost & Sullivan Malaysia Excellence Award• Facilities Management Company of the Year – Faber GroupFIABCI Prix d’Excellence Awards• Public Infrastructure/Amenities Category (Kota Iskandar Phase 1) – UEM LandInternational Property Awards – Asia Pacific• Best Commercial High Rise Development in Asia Pacific and Malaysia – Arcoris Mont’Kiara,

Sunrise• Best Mixed-Use Architecture in Malaysia (Highly Commended) – Arcoris Mont’Kiara,

SunriseEditor’s Choice Award• Best Property Management Company – SunriseThe Edge Top Property developers Awards• Top Ten (2003-2011) Property Developer – SunriseFIABCI Malaysia Property Award• Master Plan Category (Nusajaya) – UEM Land• Residential High-Rise Category (10 Mont’Kiara) – SunriseMalaysia Sustainability Reporting Award (MaSRA)• Reporting on Environment Performance (Winner) – UEM Environment• Assurance Category (Commendation) – UEM EnvironmentNational Award for Management Accounting (NAfMA)• Best Practice Award for Public Listed Company – PLUS

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FIABCI Prix d’Excellence Awards• Master Plan Category (Nusajaya) – UEM LandInternational Property Awards – Asia Pacific• Best Architecture Multiple Residence in Asia Pacific 2012-2013 (East Ledang) – UEM Land• Best Public Service Architecture in Asia Pacific 2012-2013 (Wilson Special Needs School in

Auckland, New Zealand) – Opus International Consultants LimitedPUTRA Brand Awards• Transportation, Travel & Tourism Award (Bronze) – PLUS

AP Production Quality Award • Warranty Reduction Achievement Award• Zero Field Action Achievement AwardPetronas Carigali Sdn Bhd• Merit Award in recognition of UJD’s HSE performance & contributions• PCSB DD Contractors’ HSE Performance FY2010/2011 – Bronze Award• Outstanding Vendor AwardHonda Malaysia Sdn Bhd• Continuous Effort Award Toyota Industries Corporation• Diamond Membership Recognition – Toyota Material Handling International Premier ClubInternational Association of drilling Contractors• Eleven Years Without Lost Time IncidentModenas• Best Performance Vendor Multi-National CategoryTMC, Japan• VA (Value Analysis) AwardsMalaysian Business• CIMA Enterprise Governance Awards 2011 – Merit Award• CIMA Enterprise Governance Awards 2011 – CSR Category First Runner-UpNST/Maybank Car of the Year Awards Night• Toyota Prius – Eco Innovation Awards 2011Shell V-Power Autoworld Car of the Year Awards• Toyota Altis – Best Passenger Car (Compact)• Toyota Hilux 3.0G – Best pick-up truckKobelco International Co. Pte Ltd, Singapore• Outstanding Loader Backhoe Market ShareJ.d. Power Asia Pacific• IQS#1 – Hilux

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Company Products/Services

AFFINBANK • Affin Pluso Current account that is as good

as savings account. Cheque writing convenience. High interest calculated daily & credited monthly. Low initial deposit – RM1,000.

BIMB Holding • Takaful myGenLifeo Takaful myGenLife, is a Shariah-

compliant investment-linked family takaful plan with flexible options, to protect the loved ones due to unfortunate event of death or Total and Permanent Disability (TPD). A lump sum payment will be payable to ease the financial burden.

Company Products/Services

Boustead Holdings Berhad

Takaful myGenLifeo In its effort to promote a caring

society among Malaysians, BH Petrol has embarked on a joint partnership with RTM on a new CSR programme called “Di Celah-Celah Kehidupan”. The segment aired over RTM1 depicts real life stories of the ‘rakyat’ facing poverty, disability and old age in need of care and attention.

CCM • CHAMPSo CHAMPS is a leading children’s

multivitamin brand in Malaysia The product which is Halal certified is produced by CCM specifically for GTP’s ‘Vitamin for School Programme’. The product is free of charge for students who were selected for the programme by 1MDB and is not available to the public at large.

Appendix E – 1Malaysia Products/Services For The ‘Rakyat’

pg 85

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Company Products/Services

CIMB • Government Frequent Travelers Programme (Partnering with CIMB)o Introduction of the 1Malaysia

Generic Card design in support of the 1Malaysia initiative. Designed to alleviate the burden of frequent tolled highway users by offering a 20% rebate for 80 toll transactions a month.

KWSP/EPF (GLIC)• 1Malaysia Retirement Savings Schemeo The 1Malaysia Retirement

Savings Scheme, an initiative by the Government, was launched in January 2010 to encourage self-employed Malaysians and those without a fixed monthly income including housewives to contribute voluntarily to the EPF.

LTH (GLIC) • Automated Teller Machineo LTH offers services to customers

through various ATM units with strategic partner banks (Bank Islam & Bank Rakyat). This is to increase the touch-points from 123 to more than 1600 ATM units.

Company Products/Services

LTH (GLIC) • Mobile Countero A systematic mobile service

counters setup outside of LTH premises. Provides convenience for Malaysians, particularly those in suburban, rural and remote areas.

LTAT (GLIC) • Affordable Houseso Develop affordable houses for

Angkatan Tentera Malaysia (ATM) community.

• Products at subsidise cost for Angkatan Tentera Malaysia (ATM) communityo Provide subsidised products to

the Angkatan Tentera Malaysia (ATM) community.

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Company Products/Services

MAHB • KLIA 1 Toucho Available in English and Bahasa

Malaysia, it is a 24 hour self service interactive voice response system that recognises Caller ID and will inquire if the caller needs an update on the previous query. KLIA 1 Touch has been serving MAHB’s customers since May 2009.

MAS • MALAYSIA AIRLINES LAUNCHES ‘SAYA NAK CUTI’ Packageo Malaysia Airlines delights

travelers with the ‘Saya Nak Cuti’ package by MASholidays offering guests great value for domestic holidays.

Maybank • Maybank & Pos Malaysia Shared Banking Serviceso POS Malaysia’s extensive

nationwide coverage as a touch point to provide easy access to financial services including in areas where Maybank does not have branches.

Company Products/Services

Maybank • Yippie Saving Accounto An In-Trust savings account for

children aged below 18 years, offering high interest rate of up to 2.75% p.a.

• disabled Friendly Brancheso Branches with facilities and

services for wheelchair bound users incorporating designated parking lots and ramps.

MBSB • V1 Malaysia Packageo Offer Personal Financing to

Government Staff, Employees of Statutory Bodies, Government-Linked Companies (GLCs) and selected Public Listed Companies. The competitive profit rates are amongst the lowest in the finance industry.

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Company Products/Services

MRCB • Stesen Sentral Kuala Lumpur (SSKL)o Operational since 2001, SSKL

offers global connectivity and seamlessly links urban and suburban residential, commercial and industrial areas via all six rail systems – KLIA Express Rail Link, KLIA Transit, RAPID KL, KTM Komuter, KTM Intercity and KL Monorail Services. The station receives up to 150,000 passengers daily.

PNB (GLIC) • Amanah Saham 1Malaysiao The Fund seeks to provide regular

and consistent income stream whilst preserving the unit holders’ investment capital over a long term horizon through a diversified portfolio of investment.

Sime darby • Sime darby Health Awareness and Research Programmeo Diabetes Awareness Programme

at the rural areas. A collaboration between Yayasan Sime Darby (YSD) and National Diabetes Institute (NADI). This collaboration has increased the awareness level of Cancer Research Initiatives Foundation (CARIF)

Company Products/Services

TM • Jimat Hebat (Super Save Package)o A low-cost broadband package

targeted at low income group in rural areas.

TNB • The TNB eServices/Care-Lineo TNB is offering online services

to the “Rakyat” via its eServices and promoting its products and services via its Care-Line facilities.

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Company Products/Services

THP • Creating Sustainable Communities – The THP Wayo This is the development of Native

Customary Rights (NCR) land into oil palm plantations land. THP Agro Management Sdn Bhd (our wholly owned subsidiary), is the management agent for the joint development between THP, State Agency and the Natives. THP jointly developing the NCR land in Beladin & Simunjan, Sarawak with a planted area of approximately 2,600 hectares. This will generate economic spin-off and creating sustainable communities with better basic amenities. It will also provide monthly cultivation incentives to showcase THP gratitude, sensitivity, sincerity and commitment towards the projects.

UEM • PLUSMiles by PLUS Malaysia Berhado PLUSMiles, a customer loyalty

programme developed by Projek Lebuhraya Usahasama Berhad, is aimed at rewarding customers for their continuous support. The programme is also in line with the Government’s initiative to encourage customers to use Electronic Toll Collection (ETC) system for an efficient and smooth drive on highways. With a PLUSMiles card, members are entitled to 5% PLUSMiles toll rebate, earn reward points, and enjoy other discounts and privileges. In collaboration with CIMB, the PLUSMiles card is Touch ‘n Go enabled and thus it can be used at other toll roads, parking, public transport and retail outlets.

Company Products/Services

UEM • PLUSRonda 1Malaysia by Plus Malaysia Berhado PLUSRonda 1Malaysia provides

assistance to highway users throughout the PLUS highway network. PLUSRonda’s primary task is to patrol PLUS’ highways and provide assistance to highway users such as minor repairs, towing small vehicles to a safe place, traffic management and coordination of emergency services. The PLUSRonda team is available 24-hours a day, 365-days a year and they can be reached via toll free PLUSLine 1800-88-0000, or emergency telephones located at every 2 kilometres along PLUS’ highways.

UMW • New Perodua MYVIo New evolution to the existing

Myvi. Greater accessibility and easy control. Enhanced visibility, sophistication, safety features, reduced noise and vibration, improved interior and exterior designs.

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K

1

811

6

5 4

7 7

2

3 3

6

1

3

3

2

3

13

2

4

2 1

1

1

1

1

2

1

2

2

1 1

1

2

1 1

1

1

5 2

Cou

ntrie

s w

ith G

20 p

rese

nce.

The

num

ber

den

otes

the

num

ber

of G

20 in

the

res

pec

tive

coun

trie

s.

Ap

pen

dix

F –

G20

Fo

otp

rint

pg 90

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AFFIN Affin Holdings Berhad

AFFINBANK Affin Bank Berhad

ASP Average Selling Price

ATM Automated Teller Machine

Axiata Axiata Group Berhad

BETR Bumiputera Economic Transformation Roadmap

BHB BIMB Holdings Berhad

BIMB Bank Islam Malaysia Berhad

Boustead Boustead Holdings Berhad

CAGR Compounded Annual Growth Rate

CCM Chemical Company of Malaysia Berhad

CIMB CIMB Group Holdings Berhad

CIP Corporate Integrity Pledge

CPOs Chief Procurement Officers

EP Economic Profit

EPF Employees Provident Fund

EPPs Entry Point Projects

ETP Economic Transformation Programme

FBM KLCI FTSE Bursa Malaysia Kuala Lumpur Composite Index

FTA Free Trade Agreements

FY Financial Year

G20 A selection of originally 20 larger GLCs controlled by the Government-Linked Investment Company constituents of the Putrajaya Committee on GLC High Performance. There are currently 17 GLCs in G20 due to various mergers, demergers and corporate exercises.

GdP Gross Domestic Product

GEMS Graduate Employability Management Scheme

GLC Government-Linked Company

GLCT GLC Transformation

GLIC Government-Linked Investment Company

GNI Gross National Income

GTP Government Transformation Programme

HPW High Performing Work Force

JPA Jabatan Perkhidmatan Awam

KNB Khazanah Nasional Berhad

KPIs Key Performance Indicators

LdA Leadership Development Audit

LdC Leadership Development Circle

LTAT Lembaga Tabung Angkatan Tentera

LTH Lembaga Tabung Haji

MAHB Malaysia Airports Holdings Berhad

MARdI Malaysian Agriculture Research and Development Institute

MAS Malaysia Airline System Berhad

Appendix G – Acronyms & Abbreviations

pg 91

Page 93: transformation programme

Maybank Malayan Banking Berhad

MBSB Malaysia Building Society Berhad

MINdA Malaysian Directors Academy

MRCB Malaysian Resources Corporation Berhad

MRO Maintenance, Repair and Overhaul (MRO)

MSWG Minority Shareholder Watchdog Group

MTAB Majlis Tindakan Agenda Bumiputera

NAP National Automotive Policy

NBO Natural Born Owner

NCER Northern Corridor Economic Region

NCIA Northern Corridor Implementation Authority

NEd Non-Executive Directors’

NEIs New Economy Investments

NEM New Economic Model

NEP New Economic Policy

NKRAs National Key Results Areas on reducing crime, fighting corruption, improving student outcomes, raising living standards of low-income households, improving rural basic infrastructure, improving urban public transport and addressing cost of living

PCG Putrajaya Committee on GLC High Performance

PINTAR Promoting Intelligence, Nurturing Talent and Advocating Responsibility

PLUS PLUS Expressways Berhad

PNB Permodalan Nasional Berhad

POS Pos Malaysia Berhad

PPP Procurement Policies and Procedures

PROTON Proton Holdings Berhad

PUNB Perbadanan Usahawan Nasional Berhad

ROE Return on Equity

Sime darby Sime Darby Berhad

TalentCorp Talent Corporation Malaysia Berhad

TERAJU Unit Peneraju Agenda Bumiputra

TeraS The High Performing Bumiputera SME (HPBS) Programme

THP TH Plantations Berhad

TM Telekom Malaysia Berhad

TNB Tenaga Nasional Berhad

TSR Total Shareholder Return refers to the total return of a stock to an investor (capital gain plus dividends)

UEM UEM Group Berhad

UMW UMW Holdings Berhad

UTC Urban Transformation Centre

VdP Vendor Development Programme

YAB Yang Amat Berhormat

YB Yang Berhormat

pg 92

Page 94: transformation programme

Notes

Page 95: transformation programme

Notes